Question 1: Pronghorn Corp. purchased machinery for $417,000on May 1, 2023. It is estimated that it will have a useful life of 10 years, residual value of $17,000, production of 200,000 units, and 20,000 working hours. The machinery will have a physical life of 15 years and a salvage value of $3,000. During 2024, Pronghorn used the machinery for 2,250 hours and the machinery produced 28,000 units. Pronghorn prepares financial statements in accordance with IFRS.From the information given, calculate the depreciation charge for 2024 under each of the following methods, assuming Pronghorn has a December 31 year end.Calculte the capital costs allowance for 2024 when the CCA rate is 20%, assuming the machinery is eligible for the Accelerated Investment Incentive.
Question 2: Pharoah Ltd. purchased machinery on January 1, 2023, for $58,320. The machinery is estimated to have a residual value of $7,920 after a useful life of eight years. Calculate the 2023 depreciation expense using the sum-of-the-years’-digits method, but assuming the machinery was purchased on April 1,2023. (Do not round intermediate calculation and round answer to 0 decimal places, e.g. 5,275.).
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