Exercise 6 (A) The Biscuit Manufacturing Company commenced business on 1 January Year 1 with capital of $22,000 contributed by the owner. It immediately paid cash for a biscuit machine costing $22,000. It was estimated to have a useful life of four years and at the end of that time was estimated to have a residual value of $2,000. During each year of operation of the machine, the company collected $40,000 in cash from sale of biscuits and paid $17,000 in cash for wages, ingredients and running costs. Required 1. Prepare spreadsheets for each of the four years analyzing the transactions and events of the company. 2. Prepare a balance sheet at the end of Year 3 and an income statement (profit and loss account) for that year. (B) The biscuit machine above was sold at the end of Year 4 for a price of $3,000. Required: 1. Prepare the spreadsheet for Year 4 analyzing the transactions and events of the year. 2. Prepare the balance sheet at the end of Year 4 and the income statement (profit and loss account) for Year 4. 3. Explain to a non-accountant the accounting problems of finding that the asset was sold for $3,000 when the original expectation was $2,000