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E11.3 (LO 3) (Depreciation CalculationsStraight-Line, Double-Declining-Balance; Partial Periods) Gambit Corporation purchased a new plant asset...

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Accounting

E11.3 (LO 3) (Depreciation CalculationsStraight-Line, Double-Declining-Balance; Partial Periods) Gambit Corporation purchased a new plant asset on April 1, 2023, at a cost of $769,000. It was estimated to have a useful life of 20 years and a residual value of $300,000, a physical life of 30 years, and a salvage value of $0. Gambits accounting period is the calendar year. Gambit prepares financial statements in accordance with IFRS.

Instructions

1.Calculate the depreciation for this asset for 2023 and 2024 using the straight-line method.

2.Calculate the depreciation for this asset for 2023 and 2024 using the double-declining-balance method.

3.Calculate the depreciation for this asset for 2023 and 2024 using the straight-line method and assuming Gambit prepares financial statements in accordance with ASPE.

4.Discuss when it might be more appropriate to select the straight-line method, and when it might be more appropriate to select the double-declining-balance method.

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