ABC Aerospace Inc.adheres to IFRS and applies component accounting to its major long-lived asset categories.Accordingly,the following data pertain to the company's fleet of test aircraft as at December 31,2013 (in millions $) : $\begin{array} { l l l l } \text { Category } & \underline { \text { Cost } } & \text { Accumulated Depreciation } & \text { Net Book Value } \\\text { Avionics } & \$ 100 & \$ 48 & \$ 52 \\\text { Fuselage \& Wings } & \$ 200 & \$ 120 & \$ 80 \\\text { Aircraft Engines } & \$ 20 & \$ 16 & \$ 4\end{array}$ Additional information includes the following: - The avionics have a salvage value $2 and a remaining useful life of ten years and are depreciated on a straight-line basis.
- Both the fuselage and wings and aircraft engines are depreciated at a declining rate of 25%.
On July 1^st,2014,the aircraft's engines were all disposed of for $1.5 million.On that same date,new engines were purchased in the amount of $10 million with a useful life of 20 years and no salvage value.Determine the gain or loss on disposal of the old aircraft engines.

Question

ABC Aerospace Inc.adheres to IFRS and applies component accounting to its major long-lived asset categories.Accordingly,the following data pertain to the company's fleet of test aircraft as at December 31,2013 (in millions $) :

\begin{array} { l l l l } \text { Category } & \underline { \text { Cost } } & \text { Accumulated Depreciation } & \text { Net Book Value } \\\text { Avionics } & \$ 100 & \$ 48 & \$ 52 \\\text { Fuselage \& Wings } & \$ 200 & \$ 120 & \$ 80 \\\text { Aircraft Engines } & \$ 20 & \$ 16 & \$ 4\end{array}

Additional information includes the following: - The avionics have a salvage value $2 and a remaining useful life of ten years and are depreciated on a straight-line basis.
- Both the fuselage and wings and aircraft engines are depreciated at a declining rate of 25%.
On July 1^st,2014,the aircraft's engines were all disposed of for $1.5 million.On that same date,new engines were purchased in the amount of $10 million with a useful life of 20 years and no salvage value.Determine the gain or loss on disposal of the old aircraft engines.

Quizplus · Accepted Answer

The Answer of ABC Aerospace Inc.adheres to IFRS and applies component accounting to its major long-lived asset categories.Accordingly,the following data pertain to the company's fleet of test aircraft as at December 31,2013 (in millions $): $$\begin{array} { l l l l } \text { Category } & \underline { \text { Cost } } & \text { Accumulated Depreciation } & \text { Net Book Value } \ \text { Avionics } & \$ 100 & \$ 48 & \$ 52 \ \text { Fuselage \& Wings } & \$ 200 & \$ 120 & \$ 80 \ \text { Aircraft Engines } & \$ 20 & \$ 16 & \$ 4 \end{array}$$ Additional information includes the following: - The avionics have a salvage value $2 and a remaining useful life of ten years and are depreciated on a straight-line basis. - Both the fuselage and wings and aircraft engines are depreciated at a declining rate of 25%. On July 1^st,2014,the aircraft's engines were all disposed of for $1.5 million.On that same date,new engines were purchased in the amount of $10 million with a useful life of 20 years and no salvage value.Determine the gain or loss on disposal of the old aircraft engines.

ABC Aerospace Inc Additional Information Includes the Following: - the Avionics Have a Its