On June 30, 2021, Rosetta Granite purchased equipment for $156,000. The estimated useful life of the equipment is eight years and no residual value is anticipated. An important component of the equipment is a specialized high-speed drill that will need to be replaced in four years. The $38,000 cost of the drill is included in the $156,000 cost of the equipment. Rosetta uses the straight-line depreciation method for all equipment.

1.Calculate depreciation for 2021 and 2022 applying the typical U.S. GAAP treatment.

2.Calculate depreciation for 2021 and 2022 applying IFRS.