Question 2 (28 marks) Part I (12 marks) Peter Company purchased a powder machine on 5 April 2018 at a cost of $100,000 with a residual value of $20,000. The company's year-end date is 31 December. The estimated useful life of this machine was ten years. It is estimated that it can process 8,000 pounds of powder over its useful life. Compute the annual depreciation expense of the machine in 2018 and 2019 respectively by using the following methods: (show your workings): (i) Straight-line method (with half-year convention), and (ii) 200%-declining balance (with the nearest whole month); and () Units-of-output method (processed 450 pounds and 820 pounds of powder in 2018 and 2019 respectively). Part II (16 marks) On 3 June 2016, Premier Company bought an equipment at $5,000,000. The useful life of the equipment was estimated to be five years, with a residual value of $500,000. The company uses straight-line depreciation method with half-year convention and adjusts its accounts annually with the year-end on 31 December. Consider the following as two independent assumptions: (a) Assuming that on 8 May 2019, the company sold the equipment for $1,900.000, receiving $600,000 cash and a two-year, 10% note receivable for the remaining balance. Prepare the journal entries to record the disposal of the equipment on 8 May 2019. (10 marks) (b) Assuming that on 1 January 2021, the company had added a new component of $300,000 in the equipment to enhance the speed. The company revised the estimated useful life of the equipment from five years to seven years with residual value of $400,000 (1) Compute the book value of the equipment at 1 January 2021 after upgrade (2 marks) (11) Prepare the journal enines to record the depreciation expense for 2021.(4 marks)