Chong Corp. purchased a machine on July 1, 2020, for $30,000. Chong paid $200 in title fees

Question:

Chong Corp. purchased a machine on July 1, 2020, for $30,000. Chong paid $200 in title fees and a legal fee of $100 related to the machine. In addition, Chong paid $500 in shipping charges for delivery, and $400 to a local contractor to build and wire a platform for the machine on the plant floor. The machine has an estimated useful life of 10 years, a total expected life of 12 years, a residual value of $6,000, and no salvage value. Chong uses straight-line depreciation.

(a) Calculate the 2020 depreciation expense if Chong prepares financial statements in accordance with IFRS.

(b) Calculate the 2020 depreciation expense if Chong 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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