Question 9 Partially correct Mark 2.50 out of 10.00 P Flag question Estimating Useful Life, Percent Used Up, and Gain or Loss on Disposal Husky Energy is one of Canada's largest integrated energy companies. Based in Calgary, Alberta, Husky is publicly traded on the Toronto Stock Exchange. The Company operates in Western and Atlantic Canada, the United States and the Asia Pacific Region with upstream and downstream business segments. The company uses IFRS to prepare its financial statements. During 2018, the company reported depreciation expense of $2,591 million. The property and equipment footnote follows. III - Oil and Processing. Retail Gas Transportation and Property, Plant and Equipment (in C$ millions) Properties and Storage Upgrading Refining Other Total Cost Dec 31, 2017 $41,815 $86 $2,599 $9,191 $2,930 $56,621 Additions 2,465 12 62 744 151 3,434 Acquisitions 64 3 67 Transfers from exploration and evaluation 79 79 Intersegment transfers (5) 5 Changes in asset retirement obligations 43 2 (2) (5) 7 45 Disposals and derecognition (632) ) (1) (643) Exchange adjustments 362 1 773 3 1,139 Dec 31, 2018 $44,196 $101 $2,659 $10,691 $3,095 $60,742 Accumulated depletion, depreciation, amortization, and impairment Dec. 31, 2017 $(26,016) $(47) $(1,462) $(3,176) 5(1,842) S(32,543) Depletion, depreciation, amortization, and impairment (1,811) (2) (123) (503) (152) (2,591) Disposals and derecognition 586 10 596 Exchange adjustments (138) (1) = (264) (1) (404) Dec 31, 2018 $(27,379) $(50) $(1,585) $(3,933) $(1,995) $(34,942) Net book value Dec 31, 2017 $15,799 $39 $1,137 $6,015 $1,088 $24,078 Dec 31, 2018 16,817 51 1,074 6,758 1,100 25,800 Required a. Compute the average useful life of Husky Energy's depreciable assets in 2018. Assume that land is 10% of "Refining." Note: Round your answer to one decimal place (for example, enter 6.8 for 6.77555). 9,259,107 x years Required a. Compute the average useful life of Husky Energy's depreciable assets in 2018. Assume that land is 10% of "Refining." Note: Round your answer to one decimal place (for example, enter 6.8 for 6.77555). 9,259,107 x years b. Estimate the percent used up of Husky Energy's depreciable assets in 2018. Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%). 65 X % c. Consider the disposals and derecognition during the year. This refers to assets that were sold and removed from the balance sheet during 2018. Calculate the net book value of the total PPE disposed during the year. Assume that Husky Energy received $4 million cash proceeds for the year. Determine the gain or loss on the disposal. Note: Do not use any negative signs with your answers. $ (43) Loss Check Partially correct Marks for this submission: 2.50/10.00. Question 9 Partially correct Mark 2.50 out of 10.00 P Flag question Estimating Useful Life, Percent Used Up, and Gain or Loss on Disposal Husky Energy is one of Canada's largest integrated energy companies. Based in Calgary, Alberta, Husky is publicly traded on the Toronto Stock Exchange. The Company operates in Western and Atlantic Canada, the United States and the Asia Pacific Region with upstream and downstream business segments. The company uses IFRS to prepare its financial statements. During 2018, the company reported depreciation expense of $2,591 million. The property and equipment footnote follows. III - Oil and Processing. Retail Gas Transportation and Property, Plant and Equipment (in C$ millions) Properties and Storage Upgrading Refining Other Total Cost Dec 31, 2017 $41,815 $86 $2,599 $9,191 $2,930 $56,621 Additions 2,465 12 62 744 151 3,434 Acquisitions 64 3 67 Transfers from exploration and evaluation 79 79 Intersegment transfers (5) 5 Changes in asset retirement obligations 43 2 (2) (5) 7 45 Disposals and derecognition (632) ) (1) (643) Exchange adjustments 362 1 773 3 1,139 Dec 31, 2018 $44,196 $101 $2,659 $10,691 $3,095 $60,742 Accumulated depletion, depreciation, amortization, and impairment Dec. 31, 2017 $(26,016) $(47) $(1,462) $(3,176) 5(1,842) S(32,543) Depletion, depreciation, amortization, and impairment (1,811) (2) (123) (503) (152) (2,591) Disposals and derecognition 586 10 596 Exchange adjustments (138) (1) = (264) (1) (404) Dec 31, 2018 $(27,379) $(50) $(1,585) $(3,933) $(1,995) $(34,942) Net book value Dec 31, 2017 $15,799 $39 $1,137 $6,015 $1,088 $24,078 Dec 31, 2018 16,817 51 1,074 6,758 1,100 25,800 Required a. Compute the average useful life of Husky Energy's depreciable assets in 2018. Assume that land is 10% of "Refining." Note: Round your answer to one decimal place (for example, enter 6.8 for 6.77555). 9,259,107 x years Required a. Compute the average useful life of Husky Energy's depreciable assets in 2018. Assume that land is 10% of "Refining." Note: Round your answer to one decimal place (for example, enter 6.8 for 6.77555). 9,259,107 x years b. Estimate the percent used up of Husky Energy's depreciable assets in 2018. Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%). 65 X % c. Consider the disposals and derecognition during the year. This refers to assets that were sold and removed from the balance sheet during 2018. Calculate the net book value of the total PPE disposed during the year. Assume that Husky Energy received $4 million cash proceeds for the year. Determine the gain or loss on the disposal. Note: Do not use any negative signs with your answers. $ (43) Loss Check Partially correct Marks for this submission: 2.50/10.00
