Snowtime Snowboards Inc. (SSI) is a snowboard manufacturer owned solely by Michael Fleming. SSI is a private company that follows ASPE, has a March 31 year end, and prepares adjusting entries annually. Noel Adebayo is the controller for SSI and reports directly to Michael. SSI has reviewed its amortization policies, and it found that a revision needs to be made. In addition, the company has significantly increased its spending on development costs. In past years, SSI expensed development costs, but in scal 2021, it has decided to change its accounting policy and instead capitalize expenditures related to development. It is now April 2021 and Michael has asked for Noel's assistance in making sure that the 2021 statements reflect these changes. You have been given the following information: 0 Appendix |: Email from Rod Cannon, plant manager 0 Appendix II: Memo from research and development (R&D) department Complete the task in the Excel Task file. Appendix I: Email from Rod Cannon, plant manager Subject: Equipment useful life TO: Michael Fleming, Noel Adebayo FROM: Rod Cannon, Plant Manager Michael, As we discussed earlier, I suggest that the remaining useful life of our MAX 500 machine should be four years starting at the beginning of fiscal 2021. Our original estimate when we purchased the MAX 500 on April 1, 2017, for $750,000, had been a 10-year useful life. My suggestion is based on information that became available in the current year, which supports that a remaining useful life of four years is a more accurate estimate. In addition, the residual value of the machine was originally estimated to be $70,000, but, based on newly available information, a more accurate estimate is a $21,000 residual value at the end of the machine's useful life. Anything else, let me know. Rod Appendix II: Memo from research and development (R&D) department To: Michael From: R&D department RE: Development costs during 2019, 2020, and 2021 Below is a list of the development costs incurred during the fiscal periods 2019 to 2021. In discussions with the accounting department, included below those costs are the costs that meet the criteria for capitalization during each of the years. 201 9 2020 2021 Total development costs expensed in the year in R&D expenses $650,000 $730,000 $760,000 Total amount included above that qualies for capitalization $420,000 $600,000 $720,000 The development costs should be amortized over a three-year period, with one-half of the annual amortization being recognized in the year of capitalization. This amortization policy is specific to our internally generated intangible assets. :J I 7 UNIT 6 TASK;BASED SIMULATION #2 Task 1 Nothing has been recorded in 2021 related to the MAX 500 machine. Noel is asked to prepare the journal entry for 2021 related to the machine (see Appendix I). Instructions: . In Column A, select the appropriate account name from the dropdown menu. An account name may be used once or not at all for each journal 0 In Column B, enter the corresponding debit amount. Round all amounts to the nearest dollar. . In Column C, enter the corresponding credit amount. Round all amounts to the nearest dollar. o All rows in the table may not be needed to complete the journal entry. . If no journal entry is needed, check the "No journal entry required\" box at the top of the table as your response. To record the journal entry for 2021 related to the MAX 500 machine. III No journal entry required A B C Account name Debit amount Credit amount U'l-h-UMA Column A drop-down options Accumulated amortization machine MAX 500 Amortization expense Loss on MAX 500 machine Machine MAX 500 Retained earnings