Wesley Co. purchased an equipment on April 1, 2013. It has an expected life of 20 years
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Question:
Wesley Co. purchased an equipment on April 1, 2013. It has an expected life of 20 years and no residual value. The company's financial year ended on December 31. The following expenditures were associated with the purchase:
Cost of equipment..............$120,000
Freight charges ........................5,200
Sales taxes ...............................7,800
Installation of equipment 27,000
Required:
(i) the straight-line method with fractional years rounded to the nearest whole month;
(ii) the 150% declining balance and using the half-year convention. (5 marks)
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