Answer the multiple questions. 1. Ore Body Corp. (OBC) runs an open-pit copper mine on land leased

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Answer the multiple questions.

1. Ore Body Corp. (OBC) runs an open-pit copper mine on land leased from the provincial government. OBC constructed several outbuildings on the mine site at a total cost of $15 million, all of which were ready for use on January 1, 20X3. Pertinent details of OBC's operation follow:

When OBC is finished mining, a term of the lease requires OBC to remove all buildings and remediate the land by creating a nature park. The estimated cost of removal and remediation is $8 million.

OBC reports its net assets in accordance with IFRS. Its year end is December 31.

OBC depreciates the buildings on a straight-line basis over the 10-year useful life of the mine. Their expected residual value is nil.

OBC uses a discount rate of 6%, which is an appropriate rate for this type of obligation.

What is the amount that OBC will report as an outbuilding asset, net, on its statement of financial position as at December 31, 20X3?

(a) $17,279,216

(b) $17,520,442

(d) $19,467,158

2. Which of the following statements regarding the exchange of non-monetary assets is true?

(a) Determining commercial substance for a transaction is based on professional judgment.

(b) All non-monetary exchanges of assets are considered incidental to the company's ordinary business activities.

(d) All transactions will result in a gain or loss being realized.

3. Gold Alive Corp. (GAC), which reports its financial results in accordance with IFRS, began operating a gold mine on April 1, 20X8. Pertinent details with respect to the mining equipment used by GAC follow:

GAC paid $1,000,000 for the equipment.
GAC estimates that the equipment, which was brought into use when the mine opened, will last approximately eight years based on scheduled production and will have a residual value of $100,000 once production is finished.
GAC depreciates its mining equipment using the units of production method.
GAC estimates that the equipment is capable of processing 20,000 ounces of gold. In 20X8, the mine processed 1,500 ounces of gold.

What is the amount that GAC will report as depreciation expense relative to the mining equipment for its year ending December 31, 20X8?

(a) $50,625

(b) $67,500

(d) $84,375

4. Fancy Retailing (FR) is a division of Huge Wholesale Corp. (HWC). Items of note for the company are as follows:

HWC reports its financial results in accordance with IFRS.
HWC's year end is December 31.
FR is a cash-generating unit (CGU).
HWC uses the cost model to report its property, plant and equipment and intangible assets.

HWC tested the FR assets for impairment on December 31, 20X6. In conjunction with this impairment test, HWC compiled the following data (all amounts are in '000s):

* The $12,000 is the combined fair value of the land and buildings sold in a single transaction.

Which of the following statements is true with respect to the journal entry resulting from the December 31, 20X6, impairment test?

(a) An impairment loss of $182 must be recognized on the patent.

(b) An impairment loss of $1,000 must be recognized on the building.

(d) The total impairment loss that must be recognized is $7,400.

5. Wood Ventures Corp. (WVC) is a publicly accountable enterprise WVC received two forms of government assistance in 20X7 to assist with the establishment of a value-added wood-processing plant, as follows:

A $300,000 loan was received April 1, 20X7, to assist with the purchase of wood- processing equipment that cost $500,000. The loan is forgivable providing that WVC continuously employs five additional people for a three-year period.

A $100,000 grant was received May 1, 20X7, to assist with the payment of employee wages to a maximum of 50% of the gross pay of three new employees.

Additional details follow:

VVVC's year end is December 31.
The wood-processing equipment was purchased and brought into use on the grant date. WVC depreciates this asset over five years on a straight-line basis. The estimated residual value is nil.
During 20X7, the gross pay to the qualifying new employees totalled $130,000.
WVC expects that it will be able to fully comply with all terms and conditions of the government assistance.
WVC elects to use the gross method to report its government assistance.

What is the amount of deferred income that WVC will report on its statement of financial position as at December 31, 20X7, pertaining to the government assistance received during the year?

(a) $255,000

(b) $260,000

(d) $290,000