Since commencing its business, BeFit has hired all the non-current assets. Considering the rapid development of the business and the significant increase of fitness enthusiasts post-pandemic, the owners of BeFit are considering to purchase a warehouse (altogether with the land). After assessing different locations and negotiation, they decided to purchase land and building for a total price of $770,000 (GST inclusive). This price is lower than the fair value, in which: While the purchasing price for land and building is lower than the total fair value, the owners need to spend extra money on other costs: Page 2 of 9 - The owners need to purchase new gym equipment, which will cost BeFit $55,000 (GST inclusive). The gym equipment is estimated to last for five years and have a residual value of $1,000. - The transfer of land ownership requires an involvement of a conveyancing lawyer to help with all the paperwork, which will cost BeFit $4,400 (GST inclusive). - Despite of having a useful life of 15 years and estimated residual value of $100,000, the building need some adjustments at the initial stage in order to support BeFit's operation. These initial costs include cost of rewiring the building $5,500 (GST inclusive) and cost of installing air conditioners for $2,200 (GST inclusive). - The owners also thought that it would be better to buy insurance for the building, which cost them $4,840 (GST inclusive) per annum. - Upon arrival, the gym equipment needs to be installed by specialists. Therefore, BeFit paid the delivery and installation costs from the gym equipment seller for $1,870 (GST inclusive) as well as $1,100 (GST inclusive) for 3-year warranty for the gym equipment. - After the installation of the gym equipment, BeFit is required to engage a professional certification body to certify that the gym equipment meets the standards for operation. The cost for the certification is $2,000 (GST exclusive). - BeFit adopts the cost model to measure the newly purchased non-current assets. Calculate the annual depreciation expense over the life of both the building and gym equipment using at least two depreciation methods (starting with year 1 ending 30 June 2022). Additionally, provide justification on which method you would advise the owners to use - the suggested method can be different for building and gym equipment. Based on the method you recommended for building and gym equipment, provide the journal entries to record the depreciation for years 1 and 2 (i.e., round to the nearest dollars). To perform the above calculations, you are required to use the "Template for Financial Modelling_PPE" provided in the Week 3 learning content folder. You must use formulas in Excel to obtain the answers. Take screenshots of your template that show the answers and Excel formulas that you used, and insert them directly in your response to Question 2. You may need to take multiple screenshots for each depreciation methods to show the Excel formula. For example
