Question B3 Part 1 Alpha Co. Lid., a Hong Kong listed printing company, bought an advanced printing machine for 55,200,000 on 28 June 2019. Alpha's management estimates the machine has a useful life of 5 years with a residue value of $400,000. The management also estimates the machine can print up to 2.500,000 copies of books and magazines during its useful life. The year-end date of the company is 31 December Required: (a) Compute the depreciation expense on the printing machine in 2019 and 2020 respectively by using the following methods (correct the answers to integer): ) Straight-line (calculated to the nearest whole month); (2 marks) (1) 150%-declining-balance calculated using half-year convention) and (2 marks) (II) Units-of-output method (books and magazines printed: 250,000 copies in 2019, 450,000 copies in 2020). (2 marks) Part II Assume Alpha Co. Ltd, uses the depreciation method as in Part I (a)(ii). On 10 April 2021, the Company decides to replace the machine with a newer model and sells the printing machine to another company, Beta Co. Ltd. for $2,800,000 cash. The Company adjusts its accounts annually with the year-end on 31 December Required: Prepare journal entry to record the depreciation expense in 2021; and (1 mark) (a) (b) Prepare journal entry at the time of disposal. (4 marks) Page 10 of 10 cahned with CamScanner Question B3 (continued) Part III On July 2017, Woo's Company purchased a machine by paying $900,000 cash and signing $300,000 5% one-year notes payable for the remaining balance. The machine was expected to be used for 5 years. The residual value was expected to be $60,000. The financial year-end date is 31 December. Straight-line method is adopted and depreciation for fractional years is recorded to the nearest full month. On 1 March 2019, the company purchased a S280,000 new engine to recondition the machine. The company paid $12,000 to install new engine and S500 interest to finance the purchase. The company believes the estimated useful life can be extended for 4 years more with residual value of $56,000 Required: Calculate annual depreciation expense of the above machine after the purchase of new engine Show your workings. (4 marks) Page 11 of 1 cahned with CamScanner