PROBLEM 3 (19 MARKS) Problem 3--Part A [10 marks]: On Jan 12021 . Seals Corporation purchased equipment for $400,000. The equipment is expected to have an eight-year useful life with no residual value. Seals Corporation uses the straight-line depreciation method for all depreciable assets. On December 31,2021 , the end of the company's fiscal year, Seals Corporation chooses to revalue the machinery to its fair value of $315,000, Seals Corponation uses the revaluation model and elimination method for the accumulated depreciation at the end of every year Requirement (i): Prepare joumal entries related to the equipment on Dee 31, 2021 (hint: Do not forget that we make depreciation entries at the end of the year). [4 marks] Requirement (ii): On December 31, 2024, Seals Corporation chooses to revalue the machinery to its fair value of $220,000. Prepare journal entries related to the equipment at the end of 2024 (hint: You may find it useful to draw a timeline of events). [ 6 marks] Problem 3--Part B [9 marks]: Clark Comp. has $16 million of goodwill on its book from the 2012 acquisition of Bix Lad. Clark owns 100\% of Bix, and records Bix assets at historical coss. At the end of 2016 fiscal year, the book value of Bix (including goodwill) was $836. The annual impairment test revealed the following information: Fair value of Bix less costs-to-sell $790 million Present value of estimated future cash flows from Bix's operations. $800 mitlion On December 31,2016 , the Bix identifiable assets had a remaining useful life of 20 years. Requirement (i): Prepare the joumal entry for any impairment loss that Clark Coop. should recognize. Show necessary calculation. For this journal entry, if it is necescary, please use the name "ldentifiable Assets" to represent all the identifiable assets of Bix that need impairment. Show necessary calculations. [4 marks] Requirement (ii): On December 31, 2020, the following information was available about the Bix segment. Fair value of Bix less costs-to-sell $690 million Present value of estimated future cash flows from Bix's operations. 5680 million Prepare the joumal entry to record any impaiment loss or impairment loss revercal in 2020 . For this journal entry, if it is necessary, please use the name "Identifiable Assets" to represent all the identifiable assets of Bix that are impaired. Show necessary calculations. [5 marks]