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Sheffield Limited purchased an oil tanker depot on July 2,2023, at a cost of $546,000...

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Accounting

Sheffield Limited purchased an oil tanker depot on July 2,2023, at a cost of $546,000 and expects to operate the depot for 10 years. After the 10 years, Sheffield is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $68,250 to do this at the end of the depot's useful life. Sheffield follows ASPE.Sheffield Limited purchased an oil tanker depot on July 2,2023, at a cost of $546,000 and expects to operate the depot for 10 years. After the 10 years, Sheffield is legally required to dismantle the depot and
remove the underground storage tanks. It is estimated that it will cost $68,250 to do this at the end of the depot's useful life. Sheffield follows ASPE.
Click here to view the factor table.
Click here to view the factor table.
(a1)
Calculate the present value of the asset retirement obligation (that is, its fair value) on the date of acquisition, based on an effective interest rate of 6%.(Round factor values to 5 decimal places, e.g.
1.25124 and final answer to 0 decimal places, e.g.5,275.)
Present value of the asset retirement obligation
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