Two well-known company names in the transportation industry in Canada are Canadian National Railway Company and Canadian Pacific Railway Limited. Go to either SEDAR (www.sedar.com) or each company’s website to access the financial statements of these companies for their year ended December 31, 2017.

Instructions

a. How significant are the investments made by these companies in property, plant, and equipment? Express the size of these investments as a percentage of total assets.

b. Compare the types of property, plant, and equipment that each company reports.

c. Do the companies follow similar policies in what they capitalize as part of property, plant, and equipment?

d. What methods of depreciation are used by each company?

e. For assets that are similar at both companies, compare their useful lives or rates of depreciation. Are these similar or would applying them result in differences in the reported results for each year? Explain briefly.