Maple Leaf Foods Inc. is a producer of food products under leading brands including Maple Leaf, Maple Leaf Prime, Schneiders, and Country Natural. Exhibit 8.29 is an extract from Maple Leaf’s consolidated financial statements for the year ended December 31, 2020:

Required 

a. Determine the average age percentage of Maple Leaf’s property and equipment. Compare this with the ratio determined for Dollarama and identify which company would be able to go longer without replacing its assets based on this ratio. 

b. Given that Maple Leaf estimates that its machinery and equipment will have useful lives between 3 and 20 years, determine the annual straight-line depreciation rate that the company is using for its machinery and equipment.
c. Explain, in your own words, why Maple Leaf begins depreciation when the asset is available for use. 

d. Explain, in your own words, what Maple Leaf means when it states that “depreciation related to assets used in production is recorded in inventory and cost of goods sold.” 

e. If Maple Leaf’s net carrying amount for property and equipment was $1,721,487 thousand at its 2020 year end and $1,386,482 thousand at its 2019 year end, and its sales revenue was $4,303,722 thousand for the 2020 fiscal year, determine the company’s fixed asset turnover ratio. Compare this with the ratio determined for Dollarama and comment on which company did a better job of using its long-term assets to generate revenues.

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Cost Accumulated depreciation Net balance, December 31, 2020 Cost Accumulated depreciation Net balance, December 31, 2019 Land $54,806 Buildings, including other components Machinery and equipment $54,806 Land $50,374 $50,374 Buildings $1,051,165 (378,570) $ 672,595 Buildings $ 989,410 (342,811) $ 646,599 Machinery and equipment $1,481,617 (978,565) $ 503,052 Machinery and equipment $1,370,489 (897,340) $ 473,149 10-40 years 3-20 years Under construction $491,034 $491,034 Under construction $216,360 Maple Leaf's depreciation policies for its property and equipment state that: Property and equipment, with the exception of land, is recorded at cost less accumulated depreciation and any net accumulated impairment losses. Land is carried at cost and not depreciated. For qualifying assets, cost includes interest capitalized during the construction or development period. Construction-in-process assets are capitalized during construction and depreciation commences when the asset is available for use. Depreciation related to assets used in production is recorded in inventory and cost of goods sold. Depreciation related to non-production assets is recorded through selling, general, and administrative expense. Depreciation is calculated on a straight-line basis, after taking into account residual values, over the following expected useful lives of the assets: $216,360 When parts of an item of property and equipment have different useful lives, those components are accounted for as separate items of property and equipment. Total $ 3,078,622 (1,357,135) $ 1,721,487 Total $ 2,626,633 (1,240,151) $ 1,386,482