PROBLEM #3 (Recommended Time Allocation: 15 Minutes: 8 Marks) Gethsemane Silos Ltd (GSL) is a private company that uses ASPE GSL purchased 5302,000 of equipment on January 1, 2019. Its accumulated depreciation at December 31, 2020 is $81,200. Though GSL intends to continue using this capital asset, new circumstances at December 31, 2020 suggest that this equipment may be permanently impaired. Future net cash flows from the use of this asset are expected to be $40,000 in 2021, $30,000 in 2022, and $20,000 in 2023. The equipment is expected to have a residual value of $41,000 at the end of its useful life, which is expected to be December 31, 2023. An equipment specialist has determined that the fair value of this equipment at December 31, 2020 is 593,000. GSL depreciates this asset on a straight-line basis. Because GSL uses ASPE, it uses the "Cost Recovery Impairment Model. Required: 1. Determine if the carrying value of the equipment is "recoverable" as of December 31, 2020. Show your work. 2. Prepare the journal entry to record an impairment of the equipment on December 31, 2020. PROBLEM #4 (Recommended Time Allocation: 15 Minutes: 8 Marks) The following transactions involving intangible assets of Falkland Corporation occurred on or near December 31, 2020. Prepare the journal entry(ies) needed at that date to record the transaction. If is required at a particular date, write "None needed." 1. Falkland paid Jericho Company $ 200,000 for the exclusive right to market a particular product, using the Jericho name and logo in promotional material. The franchise runs for as long as Falkland is in business. Falkland decided to amortize the franchise over 25 years. 2. Falkland spent $ 300,000 developing a new manufacturing process and has applied for a patent. It believes that its application will be successful and that the process will be successfully implemented and used for 10 years. 3. In January, 2021, Falkland's application for a patent (#2 above) was granted. Legal and registration costs incurred were $ 35,000. The patent runs for 17 years from the grant date. The manufacturing process will be useful to Falkland for 10 years. 4. Falkland incurred S 90.000 in successfully defending another of its patents in an infringement suit. The patent expires during December 2024. 5. Falkland incurred S 200.000 in an unsuccessful patent defence. As a result of the adverse verdict, the patent, with a remaining unamortized cost of $ 99,000, is deemed worthless. 6. Falkland paid Mexico Laboratories $ 52,000 for research work performed by Mexico under contract for Falkland