- Please Answer Question 2 1 (120.12 KiB) Viewed 14 times
- Please Answer Question 2 2 (113.42 KiB) Viewed 14 times
3) Use the sum-of-the-year-digit method, to calculate depreciation expenses for 10 years Closing Carrying Value Year Opening Carrying Value Depreciation Accumulated Expense Depreciation 0 7 8 9 10 Build upon information mentioned above, calculate the depreciation expenses for the airplane based on the trips it has done. The following table displays the trips taken per year. Year The percentage of flying hours for each year out of the total number of estimated flying hours 1 16% 2 14% 3 14% 4 15% 5 11% 6 9% 7 9% 8 5% 9 4% 10 4% Total 100% 4) Use the activity method, to calculate depreciation expenses for 10 years Closing Carrying Value Year Opening Carrying Value Depreciation Expense Accumulated Depreciation 0 1 2 3 4 5 6 7 8 9 10 1 2 3 4 6
Question (2): Upon the information mentioned above, at the end of the fifth year, Al-Etihad Airline, Ltd performs an impairment test for its airplane. Assume that Al-Etihad Airline, Ltd used straight line method to calculate depreciation expenses, and determined that the fair value less costs to sell for this asset at the end of the fifth year, is equal to 90% of closing carrying amount, and its value-in-use is 85% of closing carrying amount Instructions: 1) If Al-Etihad Airline will make an entry to record the impairment loss, show the entry and the calculation process for amount of that entry. 2) Show how the asset (airplane) and its related accumulated depreciation, depreciation expenses, and impairment loss would be presented in the statement of financial position, and income statement at the end of the fifth year.