Part II (10 marks) On 2 June 2016, Snow Company purchased an equipment for $125,000 with an estimated useful of 5 years and an estimated residual value $8,000. On 31 May 2020, the Company sold the equipment for $30,000 cash. The Company uses straight-line depreciation method with half-year convention and adjusts its accounts annually with the year-end on 31 December. Required Prepare the following journal entries (show your workings): (a) to update the depreciation expense for 2020. (2 marks) (b) to dispose the said equipment. (8 marks) Part III (6 marks) On 10 January 2017, Rainy Company purchased $1,000,000 equipment, with estimated useful life of 120 months and no residual value. Straight-line method was adopted. For partial years, depreciation in the year of acquisition/upgrade/disposal is recorded to the nearest whole month. The Company records annual depreciation expense at the year-end date, 31 December. On 28 June 2019, the company spent $100,000 to upgrade the above equipment in order to enhance the capacity. The company paid $5,000 to employ a technician to upgrade the equipment and paid $1,000 interest to finance the upgrade. The company decided to extend the estimated useful life to 150 months and revise the estimated residual value to $75,000 on the same date. Required: (a) Calculate the book value of the equipment after the upgrade. Show your workings. (3 marks) (b) Calculate the annual depreciation expense of the equipment in 2019. Show your workings. (3 marks) ...--End-----.... 5