Reference no: EM133094944

Question - Taste of Teppanyaki Saskatchewan Ltd. (TTSL) owns and operates teppanyaki style restaurants in Regina and Saskatoon. The restaurants serve dishes made from ingredients including chicken, beef, shrimp, lobster and vegetables and cooked on an iron griddle known as a teppan.

On January 1, 2021, you, CPA, accepted a position as TTSL's accountant. In your role, you are responsible for preparing TTSL's ASPE compliant financial statements.

Also on January 1, TTSL's Regina restaurant took delivery of a teppan purchased from a manufacturer based in Japan. The manufacturer, Konishi Grills Inc. (KGI), invoiced TTSL in Canadian dollars rather than Japanese yen and TTSL paid the $145,000 purchase price on the January 31 due date. Included with the teppan was an invoice for customs duties of $13,000 owing to Canada Border Services Agency as well as GST of $7,250 and PST of $8,700 with all amounts due January 31. Additionally on January 1, TTSL paid $3,500 cash to have the teppan installed and connected to the propane source needed to power it.

You have been asked to prepare ONLY the January 1 journal entry (in good form) necessary to account for the purchase of the teppan. You plan to provide detailed supporting calculations and round all amounts to the nearest dollar.

According to KGI's website, the teppan is expected to have a useful life of 8 years or 13,200 hours and a residual value of $15,000. Assuming that the cost of the teppan was $180,000 (this may or may not be consistent with your journal entry), you have been asked to calculate the amortization expense to be recognized for the year ending December 31 using the double declining balance AND units of activity methods if the teppan will be used for a total 1,440 hours during 2021. You plan to clearly label your work, provide detailed supporting calculations and round all amounts other than amortization rates to the nearest dollar. Amortization rates should be rounded to the nearest cent or whole percent.