Gambit Corporation purchased a new plant asset on April 1
Gambit Corporation purchased a new plant asset on April 1, 2014, at a cost of $7 69,000. It was estimated to have a useful life of 20 years and a residual value of $300,000, and a physical life of 30 years and a salvage value of $0. Gambit's accounting period is the calendar year. Gambit prepares financial statements in accordance with IFRS.
Instructions
(a) Calculate the depreciation for this asset for 2014 and 2015 using the straight-line method.
(b) Calculate the depreciation for this asset for 2014 and 2015 using the double-declining-balance method.
(c) Calculate the depreciation for this asset for 2014 and 2015 using the straight-line method, and assuming Gambit prepares financial statements in accordance with ASPE.
(d) Discuss when it might be more appropriate to select the straight-line method, and when it might be more appropriate to select the double-declining-balance method.
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