The financial statements of The North West Company Inc. are presented in Appendix A at the end of this textbook.
Instructions
(a) What depreciation method does North West use?
(b) Identify the following amounts for the five largest components of the company's property and equipment at each of January 31, 2016, and January 31, 2015:
(1) Cost,
(2) Accumulated depreciation,
(3) Impairment losses, and
(4) Carrying amount (which the company calls "net book value").
(c) Using the amounts determined in part (b) above, what is the difference between the accumulated depreciation (the company refers to this as "accumulated amortization") reported at the end of January 2016 and 2015? What was the amount of amortization expense reported for property and equipment for the year ended January 31, 2016? (Hint: Use the property and equipment note used above.) Why is the change in accumulated amortization not equal to amortization expense?
(d) Does North West have any goodwill at January 31, 2016? If so, how much?
(e) What kinds of intangible assets does the company report at January 31, 2016? Did it have any impairment losses for its intangibles for the year ended January 31, 2016? Were any fully depreciated intangibles written off during the year?