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Question 3 (39 marks) Part I (18 marks) Vou Ltd purchased a professional coffee blender machine on 3 June 2019 at a cost of $240,000 with a residual value of $40,000. The company's year-end date is 31 December. The estimated useful life of this machine was ten years. It is estimated that it can process 4,000 kilograms (kgs) of coffee beans over its useful life. Compute the annual depreciation expense of the blender machine in 2019 and 2020 respectively by using the following methods (show your workings): (1) Straight-line method (with half-year convention); and (ii) 200%-declining balance (with depreciation calculated to the nearest whole month); and (iii) Units-of-output method (processed 300 kgs and 400 kgs of coffee beans in 2019 and 2020 respectively). Part II (15 marks) On 4 May 2016, Moment Ltd bought a mining machine at $3,000,000. The useful life of the machine was estimated to be five years, with a residual value of $150,000. The Company uses straight-line depreciation method with half-year convention and adjusts its accounts annually with the year-end on 31 December. Consider the following as two independent assumptions: (a) Assuming that on 3 April 2020, Moment Ltd sold the machine for $700,000 cash. Prepare the journal entries to record the disposal of the machine. (8 marks) (b) Assuming that on 1 January 2020, Moment Ltd had added a new component of $555,000 in the machine to enhance the hash rate. The Company revised the estimated useful life of the machine from five years to eight years with residual value of $560,001. (1) Compute the book value of the machine at 1 January 2020 after upgrade. (Show your workings) (3 marks) (ii) Prepare the journal entries to record the depreciation expense for 2020. (4 marks) Part III (6 marks) Determine the acquisition cost for (1) Land and (ii) Land improvement: Land cost $500,000 Tax paid on acquisition for the land 15,000 Paving the road 20,000 Grading the land 10,000 Planting trees 30,000 Survey fee for the land 8,000 Installing lights on the road 40,000 Electricity fee for the lights in the first month of 3,500 normal operation