Question 3 (15 marks) (A) On 1 January 2018, Orchid Limited purchased a motor car at a cost of $270,000. The motor car had an estimated residual value of $30,000 and expected to be used for 200,000 miles over its estimated useful life of 8 years. Required: (a) Assume the company uses the units-of-production method, compute the depreciation expense on the motor car if the usage of the motor car for the year ended 31 December 2018 is 35,000 miles. (2 marks) (b) Assume the company uses the double-declining-balance method, compute (i) the depreciation expense on the motor car for the year ended 31 December 2018; and (ii) the carrying amount of the motor car as at 31 December 2018. the accumulated depreciation for the motor car as at 31 December 2019. (7 marks) (B) Pansy Limited purchased an equipment for $160,000 on 1 January 2017. It has been depreciated using the straight-line method based on an estimated residual value of $10,000 and an estimated useful life of 5 years. On 31 May 2019, the equipment was sold for cash of $90,000. The year end of Pansy Limited is 31 December, Required: (a) Prepare the journal entry to record depreciation expense on equipment for the year 2019 up to the date of disposal on 31 May 2019. (Narration is NOT required.) (2 marks) (b) Prepare journal entries to record the disposal of equipment on 31 May 2019. (Narration is NOT required.) (4 marks) [Total marks for Question 3: 15 marks] 3