On January 1, 2020, Wildcat Oil Company erected an oil platf…
On January 1, 2020, Wildcat Oil Company erected an oil platform in the Gulf of Mexico. Wildcat is legally required to dismantle and remove the platform at the end of its useful life, estimated to be five years. Wildcat estimates that dismantling and removal will cost $1,000,000. Based on a 10 percent discount rate, the present value or fair value of the asset retirement obligation is estimated to be $620,920. Based on this information, what expenses will Wildcat Oil report for the year, 2020?
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