Gilles Corp. purchased a piece of equipment on February 1, 2017, for $100,000. The equipment has an

Question:

Gilles Corp. purchased a piece of equipment on February 1, 2017, for $100,000. The equipment has an estimated useful life of eight years, with a residual value of $25,000, and an estimated physical life of 10 years, with no salvage value. The equipment was delivered to Gilles's factory floor, installed, and in working condition, on March 1, 2017. On April 1, 2017, Gilles's staff used the equipment to produce the first saleable units.

(a) Calculate the 2017 depreciation expense if Gilles uses straight-line depreciation and prepares financial statements in accordance with IFRS.

(b) Calculate the 2017 depreciation expense if Gilles prepares financial statements in accordance with ASPE.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...