Week 11
Obtain the most recent consolidated financial statements for Dollarama for the fiscal years
ended February 3, 2019 and Jan 28, 2018.
REQUIRED:
3.
A) Using the column for ‘Store and warehouse equipment’ from the table, prepare
journal entries to record each of the following events. In deciding the accounts that
are affected in each entry, choose the most likely explanation for the change in a
particular account balance:
i) Additions of $39,521
ii) Depreciation of $30,676
iii) Dispositions (disposals) of (181) in the cost section and (43) in the accumulated
depreciation section. Prepare a journal entry assuming that these amounts refer
to warehouse equipment that was ‘scrapped’ in the year (i.e. was not sold, as it
was considered worthless).
B) Recall that Note 3 says the company depreciates its ‘store and warehouse
equipment’ over a useful life of between 10 and 15 years. Using the table
determine the AVERAGE cost of the ‘Store and warehouse equipment’ over the
fiscal year ending Feb 3, 2019. [Add together the beginning of the year cost value,
and the end of the year cost value, and divide by 2]. Then divide this average cost
by the fiscal 2019 depreciation expense for store warehouse and equipment, which
is found on the table in the same column. How would you interpret the result (which
is measured in number of years)? Does your calculation fall within the range of 10
to 15 years?