1. The company purchased the equipment on October 1, 20X1 for $100,000, and estimated that the equipment will use for 5 years and has a residual value of $2,000. The equipment has the following capacity: 10,000 service hours. December 31 is the reporting date. The equipment provided 700 and 2,300 service hours in 20X1 and 20X2, respectively.

Required (6 marks):

Calculate depreciation expense for 20X1 and 20X2 using different methods in the following table

	Straight-line	Double-declining-balance	Activity method
20X1
20X2

2. The company provided the data of PP&E in a cash-generating unit (CGU) as follows:

	Cost	Accumulated Depreciation
Equipment A	$ 15,000	$ 8,000
Equipment B	30,000	19,000
Equipment C	45,000	23,000

The units fair value less costs to sell was $25,000. The units future cash flows

was $32,000, and its present value was $28,000. The company adopted IFRS.

Required (11 marks):

1. Prepare journal entries to record impairment.
2. If the recoverable amount of Equipment C is $19,000, prepare journal entries to record impairment.
3. If the recoverable amount of Equipment C is $24,000, prepare journal entries to record impairment.