On April 30, 2014, Canuck Oil Corp.purchased an oil tanker depot for $1,200,000 cash.The company expects to operate this depot for eight years, at which time they will be legally required to dismantle the structure and remove the underground storage tanks.Canuck Oil estimates this asset retirement obligation (ARO)will cost $200,000.Assuming a 5% discount rate, to the nearest dollar, the amount to be recorded as the ARO is

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The ARO is calculated by discounting the future obligation of $200,000 back to its present value using the 5% discount rate over 8 years. The formula for present value is PV = FV / (1 + r)^n, where FV is the future value, r is the discount rate, and n is the number of years.