Entity A is a listed company that operates the transportation business in Hong Kong. An aeroplane (A882) was purchased on 1 July 2011. A882 is made up of three main components: (1) Plane Body, (2) Wings and (3) Engines.

The original costs of the plane body, wings and engines are $37,500,000, $18,750,000 and $12,500,000 respectively. The depreciation policy of the plane body and wings is based on the straight-line method. Due to the nature of the engines, the depreciation policy of the engines is based on operating hours. The economic lives of the plane body and wings are 30 and 20 years respectively. Engine life is 15,000 operating hours.

On 30 June 2019, no further capital expenditure had been incurred on A882.

In the year ended 30 June 2019, A882 had experienced many problems of engine instability, which had cost Entity A revenue loss and extra costs. The measured expired life of the engines on 30 June 2019 was 12,000 hours. Therefore, Entity A decided to replace the whole of the engines at a cost of $15,500,000 on 1 July 2019. The old engines were also sold as scrap and Entity A received cash of $850,000 on 20 July 2019. The expected life of the new engines was 25,000 hours and in the year ended 30 June 2020, the aeroplane had used the new engines for 2,500 hours.

At the same time as the replacement of engines, Entity A took this opportunity to upgrade the wings at a cost of $2,355,000 and repaint the plane body at a cost of $1,255,000 respectively. After the upgrade of the wings, the remaining useful life became 15 years.

For calculating depreciation, all the works on A882 can be assumed to have been completed on 1 July 2019. All residual values can be taken as NIL.

REQUIRED:

(1) Measure the depreciation expense of the plane body for the year ended 30 June 2020.

Answer = $ (2) Measure the depreciation expense of the engines for the year ended 30 June 2020.

Answer = $ (3) Measure the carrying amount of the wings on 30 June 2020.

Answer = $ (4) Measure the carrying amount of A882 on 30 June 2020.

Answer = $ (5) For the sale of the old engines, is it a Gain or Loss on disposal?

Answer = $ Hint: Enter "G" for Gain or "L" for Loss on disposal.

(6) Measure the Gain or Loss on disposal from the sale of the old engines.

Answer = $