Q5. Presented below are the components related to an office building that Lockard Company is considering purchasing for SAR10,000,000 Useful Life Value Component Building structure Building engineering Building external works 60-year life 30-year life 5,400,000 2,400,000 900,000 30-year life Instructions (a) Compute depreciation expense for 2010, assuming that Lockard uses component depreciation (05 mark) (b) Assume that the building engineering was replaced in 20 years at a cost of SAR 2,600,000. Prepare the entry to record the replacement of the old component with the new component 10.5 mark) Q1. What are the items considered in Capitalization of interests? Describe each item [2 marks] Q2. Intangible assets have three main characteristics: (1) they are identifiable, (2) they lack physical existence, and (3) they are not monetary assets. Instructions (a) Explain why intangibles are classified as assets if they have no physical existence. [0.5 mark] (6) Explain why intangibles are not considered monetary assets. [0.25 mark] (c) And, why does the accounting profession make a distinction between internally created intangible assets and purchased intangible assets? [0.25 mark]