Read the case 'Jasmin Company and answer the questions below. Jasmin Company Jasmin Company (Jasmin) is a well-known company with many different businesses in Hong Kong, In order to meet the long term sustainable growth under the direction of the new Chairman; the company has purchased assets and constructed a new office building as its new head office in Ilong Kong as follows: (1) Jan 2019: truck and equipment- These assets were purchased as a lump sum for $450,000 cash. The following information was gathered. Description Initial cost on seller's books Depreciation to date on seller's books $100,000 Book value on seller's books Appraised value $300,000 $500,000 Truck Equipment S400,000 300,000 80,000 220,000 250,000 (ii) 1 March 2019: A new picee of machinery was acquired by trading in a used picco of machinery. (The oxchange was with commercial substancc.) Facts concerning the trade-in are as follows. Cost of used machinery traded Accumulated depreciation to date of sale Fair value of the machinery traded Cash payment Fair value of new machinery acquired $500,000 236,000 360,000 20,000 360,000 (iii) 1 Jan 2019: An office building was constructed as the new head office of the company. Construction began on 1 January 2019 and would be completed in 15 months. The payments to the contractor in the first year (2019) were as follows. Date Payment 1 Jan $ 550,000 1 April 120.000 1 June 360.000 1 Sept 480.000 31 Dec 300,000 On 1 January 2019, Jasmin Company secured a specific construction loan ($600,000) with a 9% interest rate to finance the construction of the new building. The building expenditures are qualifying assets of the construction in capitalization of interest costs and the capitalized interest costs should be included in the building, Jasmin drew down on the construction loan and other outstanding debt (if required to meet the payment schedule shown above. The other outstanding debt in the company during 2019: S1,000,000 bonds (due in year 2025), with 10% effective annual interest rate S500,000 long term note (due in 2030), with 8.5% interest rate per annum The company, according to the accounting standards in Hong Kong, will capitalize the maximum allowable interest costs for this construction, The CFO of Jasmin estimated that the truck and the new machinery would be used for ten years, with an estimated residual value of $20,000 and $40,000 respectively. He also estimated that the equipment would have a useful life of five years and a residual value of $5,000. Jasmin's depreciation policy specifies the 200% reducing-balance method (double declining-balance method) for equipment and the straight-line method for the truck and machinery. (The building was not yet ready for use in 2019.) Required: a (30 marks) Tor each of the above assets purchased. traded or constructed. determine the amount of each of them clearly and record the transactions by journal entries in the books of Jasmin Company for the year ended 31 December 2019. Interest expense for the year has been recorded. b (8 marks) Tor each of the assets above (except the building), calculate Jasmin Company's 2019 depreciation expense, for book purposes. Assume monthly depreciation had not been provided before the end of the year. (12 marks) Explain the purposes of providing depreciation. And discuss in what circumstances the declining balance method or reducing balance method are more appropriate than the straight line method; give reasons for your