Mandall Company constructed a warehouse for 280000 on Januar

Mandall Company constructed a warehouse for $280,000 on January 2, 2014. Mandall estimates that the warehouse has a useful life of 20 years and no residual value. Construction records indicate that $40,000 of the cost of the warehouse relates to its heating, ventilation, and air conditioning (HVAC) system, which has an estimated useful life of only 10 years. What is the first year of depreciation expense using straight-line component depreciation under IFRS? $28,000. $14,000. $16,000. $4,000.

Solution

Depreciation expense Warehouse = (280,000-40,000)/20= 12000 HVAC               = (40,000/10)= 4000 total depreciation expense 16000 answer