Reference no: EM132805915
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.
Required - Calculate the depreciation expense by each of the following methods:
a) Straight-line for 2019 and 2020;
b) 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
Required - As of December 31, 2020:
a) Calculate the carrying value of PP&E;
b) Calculate the recoverable amount;
c) Calculate the impairment loss.
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