Q6 [20% of test] Jefferson Company acquired equipment on January 2, Year 1, at a cost of $ 10 million. The asset has a five-year life, no residual value, and is depreciated on a straight-line basis. On January 2, Year 3, Jefferson Company determines the fair value of the asset (net of any accumulated depreciation to be $ 12 million. Required: Assume that the revaluation model allowed by IAS 16 is used for recognition and measurement subsequent to initial recognition. Determine Depreciation expense for a. Years 1 and 2 per year b. Years 3, 4, and 5 IS per year. .... 1$ Q7. [20% of test] Petrocan Co.operates in the oil industry, contaminating land at a foreign location. The foreign country does not have environmental laws that will require Petrocan Co. to clean up the contamination. However, Petrocan has a widely published policy to clean up all contamination that it causes, and it has a record of honoring this policy. Requirements: The company applies the three criteria of IAS 37 to determine whether recognition of a provision is appropriate. 1. ... Is the criterion 1, "present obligation as a result of a past obligating event," met? Yes. or No. 2. Is the criterion 2, "an outflow of reseources embodying economic benefits in settlement is probable," met? Yes. or No. 3. Should Petrocan Co. recognize a provision, if it cannot make a reliable estimate of the costs of clean-up. Yes. or No. _ If you answer Yes, describe the recognition in "which" financial schedule(s). _. If you answer No, What specific accounting treatment should Petrocan Co.do? D[ ] in the n[ 4. Should Petrocan Co. recognize a provision, if it can make a reliable estimate of the costs of clean-up? Yes or No._ . If you answer Yes, describe the recognition in "which" financial schedule[s]. . If you answer No, What specific accounting treatment should Petrocan Co.do? D[ ] in the n[