Reference no: EM132781012

Question -

Part 1 - Lions Inc. acquired five identical vehicles that cost a total of $500,000 on June 1, 2019. Their estimated residual value is $31,250 and expected life is six years. The company has a December 31 year end.

Instructions - Calculate the depreciation expense by each of the following methods:

Straight-line for 2019 and 2020;

Double-declining-balance for 2019 and 2020.

Part 2 - On December 31, 2020, Bengals Corp.'s statement of financial position includes the following records:

PP&E $950,000

Accumulated depreciation - PP&E (380,000)

After performing an annual review of impairment on the PP&E, Bengals obtains the following data:

Asset's value in use $565,000

Fair value less disposal costs 572,000

Instructions - As of December 31, 2020:

Calculate the carrying value of PP&E;

Calculate the recoverable amount;

Calculate the impairment loss.