Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investments Unlimited A Novel About DevOps Security Audit Compliance And Thriving In The Digital Age

Authors: Helen Beal, Bill Bensing, Jason Cox, Michael Edenzon, John Willis

1st Edition

1950508536, 978-1950508532

More Books

Students also viewed these Accounting questions