Repeat the requirements in E11- 17 assuming that Ace is an IFRS reporter and the manufacturing equipment has two components: computer controls and engine. $ 500,000 is allocated to the computer controls, which have a five- year useful life and $ 0 salvage value. $ 2,500,000 is allocated to the engine, which has a 10- year useful life and $ 250,000 salvage value. The straight- line method is used.

Required
a. Prepare the depreciation schedule for the manufacturing equipment.
b. Ace sells the manufacturing equipment for $ 1,465,000 at the end of year 5. What is the gain or loss on the sale?

Year Units of Output 1,600,000 1,600,000 1,500,000 1,500,000 1,300,000 Year Units of Output 1,300,000 1,200,000 1,200,000 1,100,000 1,100,000 10