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Akira Ltd., purchased a building near Montreat and the land on which was built for so. The pre 2009 01:51:21 land and building. A recent

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Akira Ltd., purchased a building near Montreat and the land on which was built for so. The pre 2009 01:51:21 land and building. A recent independent appraisal valued the land and bunding a market value of 1000000, www attributed to the land. Akira paid $250,000 is cash and signed a note for $600,000, payable in one year, Akira also paid 50.000 in legatos wa MODO unpaid property taxes. Akira spent $160,000 on renovations and alterations to the building so it would be whate for the com' purposes. The building is estimated to have a useful life of 20 years and a residual value of $80,000 Akira also purchased machinery with a list price of $320,000, but the company received a 5% cash discount for prompt payment. Aww pas $22,000 for transportation of the machinery and $24,000 for installation costs. The machinery has no residual value and is expected to produce 700,000 units of product over its economic useful life. 30,000 units were produced during the first year and 48,6% tits were manufactured in the second year. In addition, Akira purchased five identical delivery trucks for a total of $300,000. The trucks have an estimated unetu We of five years and a residual value of $8,000 each. Licensing and Insurance fees for the five trucks amounted to 55,000, which the company paid in cash. Akira uses the following methods to depreciate these assets: - Building: Straight-line Machinery: Units of production Trucks: Declining balance, using a rate of 30% of the carrying amount (net book value) torus 111mark 1. Prepare journal entries to record the purchase of the land, building, machinery and trucks in separate asset accounts. (11 marks) 2. Prepare the journal entry to record the depreciation expense on the building for the first year of operations. (3 marks) 3. Calculate the depreciation expense on the machinery for the second year of operations (1.5 marks) 4. Calculate the depreciation expense on the five trucks for the second year of operations. (2 marks) 5. Akira sold one of the five trucks at the beginning of the third year for $35.000 in cash. Prepare the journal entry to record the sale of the truck. (3.5 marks) 6. What are intangible assets? Give two examples. How should these assets be measured and reported in the financial statements? (3 marks) Activate Cathe

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