On January 1, 2016, Belgian Air purchases an airplane for 14,400,000. The components of the airplane and
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Question:
On January 1, 2016, Belgian Air purchases an airplane for €14,400,000. The components of the airplane and their useful lives are as follows:
Component | Cost | Useful life |
Frame | €7,200,000 | 24 years |
Engine | 4,800,000 | 20 years |
Other | 2,400,000 | 10 years |
Belgian Air uses the straight-line method of depreciation. The asset is assumed to have no salvage value.
Under IFRS, the entry to record the acquisition of the airplane would include
a) a debit to Asset/ Airplane of €14,400,000.
b) a debit to Asset/ Airplane engine of €4,800,000.
c) a debit to Asset/ Airplane frame of €14,400,000.
d) cannot be determined from the information given.
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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