Question 4 (7 points) Inshore Corporation specializes in extracting oil. It prides itself for following high environmental standards in the extraction process. On Apri 1, 2019, Inshore purchased the rights to use a parcel of land from the province of Alberta. The rights cost $6,000,000 and allowed the company to extract ore for ten years, i.e., until April 1, 2029. Inshore expects to extract the ore evenly over the contract period. At the end of the contract, Inshore must restore the land and they estimate this will cost $600,000. Inshore uses a discounted cash flow method to calculate the fair value of this obligation and believes that 6% is the appropriate discount rate. Inshore uses straight-line depreciation method and has a December 31st year-end and follows IFRS. REQUIRED: (Round all values to the nearest dollar.) 1. Prepare the journal entries to be recorded on April 1, 2019. 2. Prepare the journal entries to be recorded on December 31, 2019. 3. Prepare the journal entries on April 1, 2029, assuming the restoration costs were $595,000 ... C Paragraph BIU SUS Question 5 (1 point) Which of the following statements is correct? IFRS requires the effective-interest method to be used to amortize bond premiums and discounts; ASPE permits either the effective-interest method or the straight-line method. Both IFRS and ASPE permit either the effective-interest method or the straight-line method to be used to amortize bond premiums and discounts. ASPE requires the effective interest method to be used to amortize bond premiums and discounts; IFRS permits either the effective-interest method or the straight-line method. Both IFRS and ASPE require the effective interest method to be used to amortize bond premiums and discounts. Question 6 (1 point) The cumulative feature of preferred shares requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders. limits the amount of cumulative dividends to the par value of the preferred shares. Question 4 (7 points) Inshore Corporation specializes in extracting oil. It prides itself for following high environmental standards in the extraction process. On Apri 1, 2019, Inshore purchased the rights to use a parcel of land from the province of Alberta. The rights cost $6,000,000 and allowed the company to extract ore for ten years, i.e., until April 1, 2029. Inshore expects to extract the ore evenly over the contract period. At the end of the contract, Inshore must restore the land and they estimate this will cost $600,000. Inshore uses a discounted cash flow method to calculate the fair value of this obligation and believes that 6% is the appropriate discount rate. Inshore uses straight-line depreciation method and has a December 31st year-end and follows IFRS. REQUIRED: (Round all values to the nearest dollar.) 1. Prepare the journal entries to be recorded on April 1, 2019. 2. Prepare the journal entries to be recorded on December 31, 2019. 3. Prepare the journal entries on April 1, 2029, assuming the restoration costs were $595,000 ... C Paragraph BIU SUS Question 5 (1 point) Which of the following statements is correct? IFRS requires the effective-interest method to be used to amortize bond premiums and discounts; ASPE permits either the effective-interest method or the straight-line method. Both IFRS and ASPE permit either the effective-interest method or the straight-line method to be used to amortize bond premiums and discounts. ASPE requires the effective interest method to be used to amortize bond premiums and discounts; IFRS permits either the effective-interest method or the straight-line method. Both IFRS and ASPE require the effective interest method to be used to amortize bond premiums and discounts. Question 6 (1 point) The cumulative feature of preferred shares requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders. limits the amount of cumulative dividends to the par value of the preferred shares
