Intermediate Accounting 2 Final exam review questions and 100% correct answers 2024

long-term legal requirements - correct answer debit Loss on Settlement of Asset Retirement Obligation for $75000 - correct answer Lifeline Biofuels built an oil rig at a cost of $4.5 million. At the time that construction was complete, the company estimated the oil rig would have a useful life of 20 years (with no salvage value), after which Federal regulations would require that the oil rig be dismantled and the land area restored. The fair value of this asset retirement project was $825,000 and the present value of these asset retirement costs was $177,000 based on the 88% after−tax discount rate. At the end of the 20 year life, the company dismantles the oil rig and restores the land at a cost of $900,000. Following U.S. GAAP, the journal entry to record the completion of the restoration process would include: $300000 - correct answer Onopea Inc. considered two contingencies at the end of 2016: ** a probable loss in the range of $300,000 to $ 500 comma 000$500,000 ** a reasonably possible loss of $150,000 Under U.S. GAAP, what is the balance for contingent liabilities at the end of 2016? 5040 - correct answer In December, 2018, Shooger Candy Company began including one coupon in each package of candy and offered customers a Stuffed Shooger Bear in exchange for $5 and five coupons. The stuffed bears cost Shooger $5.30 each. Eventually, it is expected that 40% of the coupons will be redeemed. During December, Shooger sold 210,000 packages of candy and no coupons were redeemed. In its December 31, 2018 balance sheet, what amount should Shooger report as estimated liability for the coupons?