Diderot Corp. acquired a property on September 15, 2017, for $220,000, paying $3,000 in transfer taxes and

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Diderot Corp. acquired a property on September 15, 2017, for $220,000, paying $3,000 in transfer taxes and a $1,500 real estate fee. Based on the provincial assessment information, 75% of the property's value was related to the building and 25% to the land. It is estimated that the building, with proper maintenance, will last for 20 years, at which time it will be torn down and have zero salvage value. Diderot, however, expects to use it for 10 years only, as it is not expected to suit the company's purposes after that. The company should be able to sell the property for $155,000 at that time, with $40,000 of this amount being for the land. Diderot prepares financial statements in accordance with IFRS. Depreciation expense should be calculated to the nearest half month.
Instructions
Assuming a December 31 year end, identify all of the following:
(a) The building's cost
(b) The building's depreciable amount
(c) The building's useful life
(d) Depreciation expense for 2017, assuming the straight-line method
(e) Depreciation expense for 2018, assuming the double-declining-balance method
(f) The building's carrying amount at December 31, 2018, assuming the double-declining-balance method
(g) Depreciation expense for 2017, assuming the straight-line method and assuming Diderot prepares financial statements in accordance with ASPE
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-1119048534

11th Canadian edition Volume 1

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

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