On April30, 2014, Oceanarium Corporation ordered a new passenger ship, which was delivered to the designated cruise port and available for use as of June 30, 2014. Overall, the cost of the ship was $97 million, with an estimated useful life of 12 years and residual value of $30 million. Oceanarium expects that the new ship, as a whole, will provide its greatest economic benefits in its early years of operation. After further research and discussion with management,
it is determined that the ship consists of major parts with differing useful lives, residual values, and patterns of providing economic benefits:

The ship's first voyage took place on August 1, 2014. The ship sailed a total of 328,000 nautical miles in 2014. Oceanarium prepares financial statements  in accordance with IFRS.

Instructions
(a) Identify the factors to consider in determining how to account for the purchase and depreciation of the ship.
(b) Prepare the journal entry to record the purchase of the ship, assuming that Oceanarium paid cash for the purchase.
(c) Prepare the journal entry(ies) to record depreciation expense for 2014.
(d) Explain any differences in part (a) above if Oceanarium prepares financial statements  in accordance with ASPE instead of IFRS.

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Total output (nautical miles) 7.0 million Residual value Part Engines (6) Hull Body Pattern of benefits Varies with activity Highest in early years Evenly over life of body Cost Useful life 8 years 10 years 15 years $975,000 $120,000 per engine $3,350,000 per engine $502,000 7.8 million $87.8 million $15.5 million 12.6 million