Question
Canada Wheels Ltd. manufactures and sells parts for automobiles. Canada Wheels Ltd. has the following balances in its general ledger on December 31, 2018. (In
Canada Wheels Ltd. manufactures and sells parts for automobiles. Canada Wheels Ltd. has the following balances in its general ledger on December 31, 2018. (In thousands of Canadian dollars). The company had 15,000 common shares outstanding throughout this fiscal year. The company did not have any preferred shares. Assume that the income tax rate is 30% on all items.
Cost of Sales | 90,000 |
Sales Revenue | 143,700 |
Interest Expense on L/T Debt | 21,000 |
Selling and Administrative expense | 12,000 |
Write-off of obsolete inventory | 3,000 |
Impairment of tangible capital assets | 1,500 |
General Advertising expense | 1,000 |
Amortization Expense | 4,000 |
Restructuring Cost | 1,200 |
Gain on disposal of discontinued segment | 15,000 |
Deferred Loss on Pension Funds | 2,500 |
ABC Corp. has been depreciating its production equipment on straight-line basis over 10 years, taking a full year's depreciation in the year of acquisition and assuming no residual value at the end of the equipment's life. The company had invested $2,000,000 in the equipment at the beginning of 2012. At the beginning of 2014, the company decided to adjust the equipment's total useful life from 10 years up to 12 years, but with an estimated residual value of amounting to 10% of the equipment's original cost, rather than zero.
Required: Determine the amount of depreciation expense to be shown for 2013, 2014 and 2015?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started