please answer the questions below. number nine is in two different pictures

9. Gamble Company, a successful efforts company, owns a working interest in an oil field in Alaska. The field has been producing for a number of years and is expected to be producing for another 10 years. On January 1, 2019, the net book value of the field wells, equipment, and facilities totals $5,000,000. Gamble deter- mines that it should book an ARO in relation to the field. The undiscounted future cash flows to settle the ARO are estimated to be $2,000,000. When discounted at a rate of 8% for 10 years, the present value is $926,390. Later that year, Gamble's chief accountant determines that, due to changes in the state tax laws, the field should be assessed for impairment. Analysis yields the following information: Undiscounted Discounted Estimated future net cash flows before ARO $5,300,000 $3.000.000 Estimated ARO cash outflows (2.000.000) (926,390) Estimated future net cash flows after ARO $3,300,000 $2,073.610 Net book value of field assets $5.926,390 Net book value of field assets without ARO 4,500,000 REQUIRED: a. Make the entry to record the ARO on January 1, 2019. b. Determine the net book value of the field after the ARO is recorded. c. Explain how impairment would be computed if circumstances indicate the asset may be impaired Year 2020 6. Terry Company, a successful efforts company, has 100% of the working interest in a field in Texas. The field constitutes a cost center and is also an asset group for purposes of testing for impairment. In 2019, the price of oil dropped significantly: expected cash flows and risk-free rates for the remainder of the life of the field. Total Net Cash Flow Estimate (Market) Probability Credit-Adjusted (million $) Assessment Risk-Free Rate $100.0 30% 90.9 60% 85.3 10% 6.2% 2021 $91.2 50% 88.3 20% 75.4 30% 6.9% 2022 $87.5 70% 91.8 20% 65.5 10% 7.1% $ 62.4 55% 50.2 20% 45.8 6.7% 2024 $ 45.9 80% 55.5 10% 36.0 10% 5.5% 2025 $31.6 60% 21.0 20% 20% 6.1% 15.4 2023 25% REQUIRED: a. Assume that Terry's carrying value for the field is $300 million. Determine whether Terry must book impairment and, if so, record the necessary joumal entry. Round the present value factors to four decimal places. b. Assume that Terry's carrying value for the field is $400 million. Determine whether Terry must book impairment and, if so, record the necessary journal entry. Round the present value factors to four decimal places. 9. Gamble Company, a successful efforts company, owns a working interest in an oil field in Alaska. The field has been producing for a number of years and is expected to be producing for another 10 years. On January 1, 2019, the net book value of the field wells, equipment, and facilities totals $5,000,000. Gamble deter- mines that it should book an ARO in relation to the field. The undiscounted future cash flows to settle the ARO are estimated to be $2,000,000. When discounted at a rate of 8% for 10 years, the present value is $926,390. Later that year, Gamble's chief accountant determines that, due to changes in the state tax laws, the field should be assessed for impairment. Analysis yields the following information: Undiscounted Discounted Estimated future net cash flows before ARO $5,300,000 $3.000.000 Estimated ARO cash outflows (2.000.000) (926,390) Estimated future net cash flows after ARO $3,300,000 $2,073.610 Net book value of field assets $5.926,390 Net book value of field assets without ARO 4,500,000 REQUIRED: a. Make the entry to record the ARO on January 1, 2019. b. Determine the net book value of the field after the ARO is recorded. c. Explain how impairment would be computed if circumstances indicate the asset may be impaired Year 2020 6. Terry Company, a successful efforts company, has 100% of the working interest in a field in Texas. The field constitutes a cost center and is also an asset group for purposes of testing for impairment. In 2019, the price of oil dropped significantly: expected cash flows and risk-free rates for the remainder of the life of the field. Total Net Cash Flow Estimate (Market) Probability Credit-Adjusted (million $) Assessment Risk-Free Rate $100.0 30% 90.9 60% 85.3 10% 6.2% 2021 $91.2 50% 88.3 20% 75.4 30% 6.9% 2022 $87.5 70% 91.8 20% 65.5 10% 7.1% $ 62.4 55% 50.2 20% 45.8 6.7% 2024 $ 45.9 80% 55.5 10% 36.0 10% 5.5% 2025 $31.6 60% 21.0 20% 20% 6.1% 15.4 2023 25% REQUIRED: a. Assume that Terry's carrying value for the field is $300 million. Determine whether Terry must book impairment and, if so, record the necessary joumal entry. Round the present value factors to four decimal places. b. Assume that Terry's carrying value for the field is $400 million. Determine whether Terry must book impairment and, if so, record the necessary journal entry. Round the present value factors to four decimal places