Question 3 (34 marks) Better Life Hospital purchased an X-ray machine on 3 April 2019 at a cost of $468,000 The estimated useful life of this machine was five years and estimated residual value was $24,000. The management estimates that the machine can take 300,000 pictures during the useful life. Workings are required for the answers below. (a) Compute the depreciation expense of the X-ray machine at the year-end on 31 December for 2019 and 2020 by using the methods below, (i) (ii) (111) Straight-line (with depreciation calculated to the nearest whole month), 200%-declining-balance (with half-year convention), Unit-of-output (number of pictures taken: 30,000 in 2019; 18,000 in 2020). (i) Straight-line Method Depreciation expense (ii) 200%-declining- balance Method Depreciation expense Year (iii) Units-of-output Method Depreciation expense 2019 2020 (18 marks) (b) Assuming that on 1 October 2021, Better Life Hospital had added a new component of $100,000 to the X-ray machine for enhancing the speed of X-rays to reduce the radiation exposure. The installation cost was $6,000. The company revised the estimated useful life of the machine from five years to seven years with residual value of $33,400. Better Life Hospital adopted Straight-line method to the nearest whole month) as in (a)(i) above. The company updates the depreciation expenses monthly (i) Compute the book value of the machine at 1 October 2021 after upgrade. (2 marks) (ii) Compute the revised depreciation expense for the month of October 2021 (2 marks) (c) Assume that Better Life Hospital adopted 200%-declining-balance (with half-year convention) as in Part I (a)(ii) above. On 4 September 2020, the company sold the machine for $360,000 cash. The Company adjusts the depreciation expenses annually in December. (1) Prepare journal entry to record the depreciation expenses in 2020. (4 marks) (ii) Prepare journal entry to record the disposal on 4 September 2020. (8 marks)