Question 2 (a) Bright Company purchased a machine on January 1, 2019, by paying cash of $250,000. The machine has an estimated useful life of ve years, is expected to produce 500,000 units, and has an estimated residual value of $25,000. Accounting year of Covey ends on December, 31. (i) Calculate depreciation expenses and book values to the nearest whole dollar for each year of the machine's useful life under: 1. Straight-line depreciation method 2. Double declining-balance method (ii) Ifthe machine was used to produce and sell 120,000 units in 2020, what would be the depreciation expense using the units-of-production method? (iii) In 2020, the machine broke down due to mishandling by the technician. Some parts were broken and replaced for a cost of $7,500. Upon advice from the service centre, the main motor of machine was also replaced with a high speed motor that would save more energy while increasing the output of the machine. The new high speed motor cost $15,000. After all work was completed on December 31, 2020, the Company settled payment by cash, and revised the machine useful life to 7 years and residual value to $5,000. 1. Showjournal entries of Bright Company in regard to expenditure for replacement of machine parts and the high speed motor. Explain your answers. 2. Prepare depreciation schedule of the machine after December 31, 2020, using straight-line depreciation method. (iv) Continuing from (iii), on January 1, 2024, Bright Company sold the machine for $68,000 in cash. 1. Showjournal entries of Bright Company to record the disposal. 2. Explain how cash flows relating to the disposal of machine on January 1, 2024 will be shown in the Statement of Cash Flows relating to that year. (v) On January 1, 2019, Bright Company purchased a patent for $420,000 from an inventor who had developed a new manufacturing process. At the time of the purchase, the patent was registered for a remaining life of 15 years, and having an expected economic life of 10 years. 1. Showjournal entries of Bright Company to record the purchase of the patent, and amortization of the patent in 2019. 2. At the end of 2022, after amortization had been recorded through December 31, 2022, Covey concluded that the estimated future cash flows from the patent to be $250,000. The patent's estimated fair value on December 31, 2022 was $200,000. Determine whether Covey should record an impairment loss of the patent. Show the journal entry if necessary