4. Part A: 25 Marks Stephanie Design purchased a piece of equipment for $105,000 on 1 September 2013. At this time it was estimated that its useful life was 8 years, with a residual value of $15,000. On the 1 January 2014 Stephanie Design decided to revalue the equipment to $92,000 with no residual value, due to its excessive use in the previous period and a revised useful life of 5 years. Stephanie Design's financial year ends on the 31 December and business uses straight-line deprecation for its equipment calculated to the nearest whole dollar and for whole months. You are required to show all the necessary general journal entries to record the above information to ensure that the equipment is properly reported in Stephanie Design's balance sheet as at 31 December 2014. Show transactions on the following dates: 1 Sept 2013, 31 Dec 2013, 1 Jan 2014 and 31 December 2014. Part B: Cool Cars of Tara sell used motor vehicles. To help promote sales they offer a warranty of 1 year or 100,000 kilometres whichever comes first. At 30 June 2014 management estimates from industry experience warranty costs to add up to 10% of sales. Assume that Cool Cars of Tara made sales of $600,000 during financial year 2014, its first year of operation. Payments to satisfy customer warranty claims currently total $25 000 cash and $15 000 for parts during 2014. a. In the general journal, set up the provision for warranty account for 2014. b. What was the journal entry for the warranty claim in 2014? [3 marks] c. Discuss how to identify the difference between allocating costs to expenses or capital expenditure during an assets useful life. [4 marks]