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Estimating Useful Life, Percent Used Up, and Gain or Loss on Disposal Husky Energy is one of Canada's largest integrated energy companies. Based in Calgary, Alberta, Husky is publicly traded on the Toronto Stock Exchange. The | Company operates in Western and Atlan- tic Canada, the United States and the Asia Pacific Region with upstream and downstream business seg- ments. The company uses IFRS to prepare its financial statements. During 2018, the company reported depreciation expense of $2,591 million. The property and equipment footnote follows. Oil and Processing, Retall Gas Transportation and Property, Plant and Equipment (in C$ millions) Properties and Storage Upgrading Refining Other Total Cost December 31, 2017 . . ... $41,815 $ 86 $ 2,599 $ 9,191 $2,930 $ 56,621 Additions . . . 2.465 12 62 744 151 3,434 Acquisitions. . .. 64 67 Translers from exploration and evaluation. . 79 79 Intersegment transfers . . (5) 5 Changes in asset retirement obligations. .. 43 2 (2) (5) 7 45 Disposals and derecognition, . (632) (10) (1) (643) Exchange adjustments .. .. - . . . . . 362 1 - 773 1,139 December 31, 2018 $ 44.196 $101 $ 2,659 $10,691 $ 3,095 S GO,742 Accumulated depletion, depreciation, amortization, and impairment December 31, 2017 . $(26,016) $ (47) $(1,462) $ (3.176) $(1,842) $(32.513) Depletion, depreciation, amortization, and impairment . . . (1,811) (2) (123) (503) (152) (2.591) Disposals and derecognition. . .. 586 10 596 Exchange adjustments 138) (1) 264) (1) (404) December 31, 2018 $127,379 $ (50) G(1,585) $ (3,933) $(1,995) S(34,942) Net book value December 31, 2017 $15.799 $ 30 $ 1,137 $ 6,015 $ 1,080 $ 24,078 December 31, 2018 16.817 $1 1,074 6.758 1,100 25,800 Required a. Compute the average useful life of Husky Energy's depreciable assets in 2018. Assume that land is 10% of "Refining." b. Estimate the percent used up of Husky Energy's depreciable assets in 2018. How do we interpret this figure? c. Consider the disposals and derecognition during the year. This refers to assets that were sold and removed from the balance sheet during 2018. Calculate the net book value of the total PPE disposed during the year. Assume that Husky Energy received $4 million cash proceeds for the year. Deter- mine the gain or loss on the disposal

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