Recycle Exploration Is Involved with Innovative Approaches to Finding Energy

question 68

Multiple Choice

Recycle Exploration is involved with innovative approaches to finding energy reserves.Recycle recently built a facility to extract natural gas at a cost of $15 million.However, Recycle is also legally responsible to remove the facility at the end of its useful life of twenty years.This cost is estimated to be $21 million (the present value of which is $8 million) .What is the journal entry required to record the environmental liability?

• A)No journal entry required.
• B)Debit Natural Gas Facility for $21,000,000 and credit Environmental Liability for $21,000,000
• C)Debit Natural Gas Facility for $6,000,000 and credit Environmental Liability for $6,000,000.
• D)Debit Natural Gas Facility for $8,000,000 and credit Environmental Liability for $8,000,000.

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Definitions:

Adler

An early 20th-century psychologist known for his theories on individual psychology, emphasizing the importance of feelings of inferiority and the striving for superiority.

Physical Weaknesses

Refers to limitations in physical strength or endurance, often due to illness, injury, or lack of fitness.

Rational

Based on or in accordance with reason or logic; capable of reasoning or thinking clearly.

Jung

Carl Jung was a Swiss psychiatrist and psychoanalyst who founded analytical psychology, emphasizing the role of the collective unconscious, archetypes, and individuation in human psychological development.