Smith company (Smith) purchased a machine on December 2, 2021, at an invoice price of $45,000 with

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Smith company (Smith) purchased a machine on December 2, 2021, at an invoice price of $45,000 with term 3/10, net of 30. On December 6, 2021, Smith paid $540 for the delivery of the machine. On December 10, 2021, Smith borrowed money to pay the required amount for the machine. On December 31, 2021, smith paid $1,300 plus 7% PST and 5% GST. For final installation and testing of machine, Smith also paid $1,900 for interest on the borrowed money. The machine was ready for use on January 1, 2022. The machine has a useful life of 5 years (after installation and testing) and a residual value of $8,000. Partial amortization is based on months.

Required 1. Compute the recorded cost of this machine at January 1, 2022.

2. Ignore your answer above. Assume that on January 1, 2022, that the machine cost $ 47,900. What is the difference in the amount of depreciation expense recorded in 2022, if Smith used the straight-line method versus the double declining-balance method? Show your work. 3. Assume that on January 1, 2022, the cost of the machine is 47,900 and Smith uses Straight-line depreciation. On March 31, 2024, a computerized control panel costing $5,700 was added to the machine. Engineers estimate that this will extend the useful life of the machine by two years and will result in a revised residual value of $11,200. Calculate: a) The recorded value of the machine. b) The balance in the accumulated amortization account related to the machine, on december 31, 2024? 4.Assume that on December 31, 2024, Smith exchanges its existing machine in return for a similar new machine. Along with the exchange, Smith receives $3,900 of Cash the new machine has a fair value of $39,000 while the existing machine's fair value is unknown.

Prepare the journal entry to record the exchange on the following assumption:

a) The transaction lacks commercial substance.

b) The transaction has a commercial substance. Please solve in order and step by step, thanks