Repeat the requirements in E11- 17 assuming that Ace is an IFRS reporter and the manufacturing equipment has two components: computer controls and engine. $ 500,000 is allocated to the computer controls, which have a five- year useful life and $ 0 salvage value. $ 2,500,000 is allocated to the engine, which has a 10- year useful life and $ 250,000 salvage value. The straight- line method is used.

Required
a. Prepare the depreciation schedule for the manufacturing equipment.
b. Ace sells the manufacturing equipment for $ 1,465,000 at the end of year 5. What is the gain or loss on the sale?

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Year Units of Output 1,600,000 1,600,000 1,500,000 1,500,000 1,300,000 Year Units of Output 1,300,000 1,200,000 1,200,000 1,100,000 1,100,000 10