Question 4 Prepare the journal entries for the following independent situations to recognize the purchase and amortization for the first year. Explanations are not required. a) January 1, 2020, Explorer Ltd. paid $1,500,000 to acquire Imperial Ltd. Imperial had assets valued at $10,560,000 and liabilities of $9,800,000 b) Songs Plus paid for several patents on January 1, 2020 for a total price of $180,000. The patents have a legal life of 20 years and are expected to provide revenues for the next 9 years. Question 1 Skipper Manufacturing purchased equipment and a delivery vehicle on January 1, 2020. The equipment cost $70,000 and has an estimated useful life of 10 years with a residual value of $7,000. The delivery vehicle cost $225,000 and has an estimated life of 5 years or 100,000 kilometres and a residual value of $25,000. The delivery truck is expected to be driven 15,000 and 35,000 kilometres in 2020 and 2021, respectively. (8 marks) Required 1. Skipper has decided to depreciate the equipment using either the straight-line method or double declining method. Calculate depreciation for the equipment for 2020 and 2021 using the straight-line method AND the double declining method 2. Skipper has decided to depreciate the delivery truck using the units-of-production method. Calculate depreciation for the delivery truck for 2020 and 2021. Show your work for marks. 2020 Depreciation 2021 Depreciation Requirement #1 Equipment - Straight-line method Equipment - Double-Declining method Requirement #2 Delivery Truck - Units-of-Production Question 3 On January 1, 2016, SuperCyce Limited purchased a machine for $350,000. The machine was estimated to have a 7 year useful life with a residual value of $25,000. The company used the straight-line method to depreciate the machine. On December 31, 2020, the company sold the equipment for $123,000 cash. (9 marks) Required 1. Calculate the gain or loss on sale on the sale of the machine. 2. Prepare the journal entry to recognize the sale of the machine. Requirement #1 DATE ACCOUNT DEBIT CREDIT