Reference no: EM132460365

Now that you have an understanding of amortization, it's time to put .verything together. In each of the following three tasks, you will play he role of accountant for a corporation with fixed assets. You will be :alculating, analyzing, and understanding amortization for both :angible and intangible assets. You will also see how amortization affects the balance sheet.

Question 1: Analyze the straight-line, double-declining-balance, and units-of-production amortization methods  Spectacular Condo Corp. purchased exercise equipment for its 'ecreation room on January 1, 2016 for a cost of $60 000. The equipment is estimated to have a $5000 residual value and a five-year iseful life. It is also estimated that the equipment will be used more ban 100 000 times over its five-year life Ns the condominium corporation's accountant, you have been asked o analyze the following independent amortization scenanos. Please )e sure to show your calculations.

Problem A. If the condominium corporation uses the straight-line amortization method, how much amortization expense should be

Problem B. Suppose that the exercise equipment was used 16 000 times in 2016 and 24 000 times in 2017. Using the units-of-production amortization method, calculate the net book value for the year ended December 31, 2017.

Problem C. If the condominium corporation chose to use the double-declining-balance method of amortization instead, calculate the balance of the 'Accumulated Amortization, Exercise Equipment' account as of December 31, 2018. Assume that the DDB rate is 40%.

Problem D Assuming that the condominium corporation is calculating amortization for internal purposes, which method would you recommend? Explain why.

Problem E. Explain how your chosen method would be similar or different from the method required for taxation purposes here in Canada.

• To provide your answer, recreate the table on the following page in a .doc or .docx format using word-processing software. When finished, save the document and submit it for evaluation along with all of the documents from the other tasks in this assessment.