DEMONSTRATION PROBLEM Health Smart Limited (HSL) purchased a manufacturing assembly machine for its new product launch: The Total Health Watch on March 2, 2020 for $62,000 cash. It had an estimated useful life of five years and a residual value of $14,000. On February 25, 2023, the machine was disposed of. HSL's year-end is December 31, and it calculates depreciation to the nearest whole month using straight-line depreciation. Required 1. Prepare the entry to record the disposal under each of the following independent assumptions: a. The machine was sold for $26,000 cash. b. The machine was sold for $33,200 cash. c. The machine was sold for $34,180 cash. d. The old machine was exchanged for tools with a market value of $88,000. A trade-in allowance of $25,000 was offered on the old machine and the balance was paid in cash. Assume the $88,000 market value of the tools represents their fair value. Additional company transaction: Page 650 2. On January 4, 2023, the company purchases with cash a patent from a biomedical engineering firm in Winnipeg for $100,000 to enable the launch of a new Total Health Watch for individuals with diabetes that incorporates glucose/insulin monitoring into the equipment. The company estimates the useful life of the patent to be 10 years. Journalize the patent acquisition and amortization for the year. Anahsis Component: Regarding the purchase of the patent in Part 2, explain what potential adjustment might be necessary at the end of 2023 other than amortization. 1. What are the main two differences between the Free market and Command Market Marks) 2. Calculate the values in this table (5 Marks) Quantity Price FC TVC TCM C TR MR AFC AVC CATC 30 10 10 2515 3. With a 30% change in a peoduct price, the demand for the product changes by 60%. What is the price elasticity of demand for this product Show Formula) (3 Mark) 4. Define the following terms (Marks) a Law of demand Law of diminishing marginalreurs c. Equilibrium Price 3. Using the concept of economies of scale, explain why it is difficult for smaller companies to compete with larger companies. Support your answer with a relevant diagram showing the concofonomies of scale Marks) 6. With similar PPC curves in 2015, two countries are spending their resources on two different types of pendects. One country is spending more on consumer goods, and the where is spending more on capital goods. Answer the following questions: (10 Marks) What does PPC stand for . What is the difference between consumer good and capital good? c. PPC of which county shifts faster! Support your answer with enough explanation and relevant diagrams 7. Why is MC curve Ushape! Explain with the support of relevant diagrams. 2 Marks) & MC and AVC curves crowcach other at the minimum point of AVC Why? Marks) 9. What happens to the price and quantity of petrol in the market when electric cars become more
