Problem 2: Depreciation and Impairment (Ch. 11, 25 points) X, Inc. acquired and placed in service an equipment at cost $300,000 on Oct. 1, 2012. Its estimated salvage value is $30,000 and expected life is eight years. Calculate depreciation expense for 2012 and 2013 for this equipment by each of the following methods. Required: Trang/ Page: a. Double-declining balance. (Show your work. 10 points) b. Sum-of-the-years'-digits (Show your work. 10 points) c. Using the results of question a) above and assumed that in the end of year 2013, X, Inc. estimated that the machinery would generate future cash flows of $205,000 and the fair value of $200,000. X, Inc should recognize a loss on impairment of how much? (Show your work. 5 points) Problem 3: Current liabilities and Contingencies (Ch. 13, 25 points) At the financial statement date of December 31, 2020, the liabilities outstanding of X Corp. included the following: Cash dividends on common stock, $20,000, payable on Feb 10, 2021. Note payable to State Bank, $500,000, due Feb 20, 2021. Serial bonds, $1,000,000, of which $300,000 mature during 2021. Note payable to National Bank, $300,000, due January 27, 2021. The following transactions occurred early in 2021: January 26: 40,000 shares of common stock were issued for $350,000. However, $300,000 of the proceeds ($350,000) was used to liquidate the note payable to National Bank. Feb 10: The cash dividends on common stock were paid. Feb 20: The note payable to State Bank was paid. Feb 25: The corporation entered into a financing agreement with State Bank, enabling it to borrow up to $700,000 at any time through the end of 2023. Amounts borrowed under the agreement would bear interest at 1% above the bank's prime rate and would mature 3 years from the date of the loan. The corporation immediately borrowed $400,000 to replace the cash used in paying its January 20 note to the bank. March 1: The financial statements for 2020 were issued. |Required: a. Prepare the current liabilities sections of the balance sheet for X Corp. at Dec 31, 2020. (Show your work. 10 points). b. Prepare the long-term liabilities section of the balance sheet for X Corp. at Dec 31, 2020. (Show your work. 10 points). c. Prepare the appropriate note disclosure for the liabilities. (Show your work. 5 points).