Question

In: Accounting

Empire Building Co. makes toxic material used in chemical weapons. On December 31, 2008 they buy...

Empire Building Co. makes toxic material used in chemical weapons. On December 31, 2008 they buy a factory for $5 million(cash) for the production of Policus, a dangerous chemical. The plant is expected to be used for 10 years, at which time it will be dismantled and the site will be cleaned up. Empire estimates that it will cost them $10 million at the end of 2018 to remove the factory and clean the area. The risk free rate on December 31, 2018 is 4% and the adjusted risk rate for the company is 8%.

a) Record the journal entry(ies) for the purchase of the factory.

b) Record the required adjusting entry(ies) at the end of 2009.

c) On December 31, 2018 the factory is removed at a cost of 7$ million and site is cleaned up at for an additional $4 million . Record the required journal entry(ies) for the factory clean up.

Solutions

Expert Solution

Solution:

ekkarill92 answered 3 months ago
Next > < Previous

Related Solutions

1.) It is December 31. Last year, Carter Chemical Co. had sales of $16,000,000, and it...
1.) It is December 31. Last year, Carter Chemical Co. had sales of $16,000,000, and it forecasts that next year’s sales will be $14,880,000. Its fixed costs have been and are expected to continue to be $6,400,000, and its variable cost ratio is 12.50%. Carter’s capital structure consists of a $13.5 million bank loan, on which it pays an interest rate of 9%, and 250,000 shares of common equity. The company’s profits are taxed at a marginal rate of 40%....
The following items represent various material contingencies of Luge Co. at December 31, Year 5, and...
The following items represent various material contingencies of Luge Co. at December 31, Year 5, and events subsequent to December 31, Year 5, but prior to the issuance of the Year 5 financial statements. For each item, select from the option list provided the correct reporting requirement. Each choice may be used once, more than once, or not at all. a) Disclosure Only b) Accrual and Disclosure c) Neither accrual nor disclosure d) Accrual of the minimum amount of range...
Phosgene (COCl2) is a very toxic molecule that was used as a chemical weapon in World...
Phosgene (COCl2) is a very toxic molecule that was used as a chemical weapon in World War I. It can also be a precursor to chemicals used to make closed-cell polyurethane insulation, which has a very high R value. Phosgene can decompose according to the following equilibrium reaction. The KP for this reaction is 6.8 x 10-9 at 373 Kelvin. Calculate the equilibrium pressures of each gas if a container initially contains phosgene with a partial pressure of 2 atm....
Machlin provided the following data for 2008 and 2009: Inventory December 31, 2007 $174,000 December 31,...
Machlin provided the following data for 2008 and 2009: Inventory December 31, 2007 $174,000 December 31, 2008 187,000 December 31, 2009 196,000 Cost of goods sold 2008 $547,000 2009 586,000 Gross margin 2008 $253,000 2009 291,000 Do not round until your final answers. Round all calculations to two decimal places. (a) Calculate the inventory turnover ratio for 2008 and 2009. 2008 ___ times 2009 ____ times (b) Calculate the gross margin return on inventory investment for 2008 and 2009. 2008...
Steel is used as a roofing material in a chemical refinery located in Darwin, Northern Territory....
Steel is used as a roofing material in a chemical refinery located in Darwin, Northern Territory. Estimate atmospheric corrosion rate of steel by employing the following approaches ISO 9223 Bilogarithmic law ISO CORRAG Discuss the general trend of the results and, if any, the discrepancies among various methods. Citation to scientific literature and any necessary sources for climatic conditions are encouraged
Rory Co.'s prepaid insurance was $50,000 at December 31, 20X5 and $25,000 at December 31, 20X4....
Rory Co.'s prepaid insurance was $50,000 at December 31, 20X5 and $25,000 at December 31, 20X4. Insurance expense was $20,000 for 20X5 and $15,000 for 20X4. What amount of cash disbursements for insurance should be reported in Rory's 20X5 net cash flows from operating activities presented on a direct basis? The answer is $45,000. *how to get $45,000? **how are insurance payment and insurance expense different? It's asking cash disbursements...is it the same as insurance payment or expense? Please help,...
In a study of the thermal inertial properties of aerated concrete used as building material, average...
In a study of the thermal inertial properties of aerated concrete used as building material, average interior temperatures were investigated. These temperatures are known to have an approximately normal distribution. The claim is the average interior temperature is 22.5 degrees. A consumer advocate believes this temperature is in fact less than 22.5 degreess. To this end, he collects a sample of 15 measurements and finds the average temperature of the sample to be 20.9 degrees with standard deviation of 3.5...
Identify and describe a primary building material used for the construction of a single story commercial...
Identify and describe a primary building material used for the construction of a single story commercial building. Why would this material be selected over the other primary materials we discussed this semester?(Wood, Concrete, and steel) Items of importance in your discussion include: -relative cost for this project to other materials for this kind of project -material handling and assembly -methods available to speed up material assembly time on site
Balance sheet and income statements amounts as of December 31, 2008 for Lesley’s Tutoring Service are...
Balance sheet and income statements amounts as of December 31, 2008 for Lesley’s Tutoring Service are listed below. Prepare a balance sheet and income statement in good form. Supplies                                        $1,000                    Revenues     $23,000 Rent expense                               12,000                    Cash               15,000 Accounts payable                           9,000                    Drawings          1,000 Accounts receivable                       3,000                    Notes payable 1,000 Depreciation expense                    5,000                    Equipment        6,000 Supplies expense                           2,000                    Building           16000 Inventory                                         1,800                    Tax payable        960 Prepaid Rent                                 1,500                     Lesley, Capital                                                                                                     ?
Balance sheet and income statements amounts as of December 31, 2008 for Lesley’s Tutoring Service are...
Balance sheet and income statements amounts as of December 31, 2008 for Lesley’s Tutoring Service are listed below. Prepare a balance sheet and income statement in good form. Supplies $1,000 Revenues $23,000 Rent expense 12,000 Cash 15,000 Accounts payable 9,000 Drawings 1,000 Accounts receivable 3,000 Notes payable 1,000 Depreciation expense 5,000 Equipment 6,000 Supplies expense 2,000 Building 16000 Inventory 1,800 Tax payable 960 Prepaid Rent 1,500 Lesley, Capital ?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT