Lakeshore Packaging Inc. replaced a failed motor on a high-speed processing line. The new motor cost $52,000, and installation cost $3,500. The old motor had a remaining carrying amount of $9,000. The replacement increases output capacity compared to the original motor. How should Lakeshore record the replacement?

T/F: Depreciation stops when an asset is temporarily idle but still available for use.

Granite Coast Fabrication Ltd. acquired a CNC milling machine on March 1 for $420,000. Delivery and rigging required to position the machine cost $18,000, and diagnostic testing before the machine could operate cost $6,000. The machine was fully installed and ready for use on April 1. Employee training that occurred after commissioning cost an additional $14,000. What amount should Granite Coast capitalize as the cost of the machine?

T/F: Under ASPE, subsequent expenditures that extend useful life may be capitalized.

Lakeshore Packaging Inc. replaced a failed motor on a high-speed processing line. The new motor cost $52,000, and installation cost $3,500. The old motor had a remaining carrying amount of $9,000. The replacement increases output capacity compared to the original motor. How should Lakeshore record the replacement?

Skyline Engineering Ltd. sells equipment with a cost of $950,000 and accumulated depreciation of $430,000. The buyer pays $440,000, but Skyline must cover $12,000 in decommissioning and transport costs as part of the sale agreement. What gain or loss should be recognized?

T/F: Depreciation stops when an asset is temporarily idle but still available for use.

A company switches from straight-line to units-of-production. Under ASPE this is:

A company uses declining-balance at 30%. Carrying amount is $50,000. What is depreciation for the year?

Ironwood Sawmill Ltd. purchased equipment on January 1 for $500,000. Management estimated a useful life of 8 years and adopted a 20% declining-balance depreciation rate for financial reporting purposes under ASPE. The equipment is expected to have no material residual value. What is the depreciation expense for Year 1?