Problems $(18$ points each$)$

Merganser Company purchased a machine on January $2,2021.$ The total cost of the purchase was $$415,000.$ The machine has an estimated salvage value of $$25,000$ and an estimated useful life of $6$ years. In June of $2022,$ the company spent $$12,000$ to replace the gasoline$-$powered engine with an electric engine; this changed the estimate of the machine's total useful life to $13$ years. Depreciation for $2021$ was recorded before the overhaul. Show calculations for the annual straightline depreciation amounts for this asset for $2021$ through $2023.$

Pelican Industries purchased a building in $2017$ for $$541,000.$ It had an estimated useful life of $30$ years and a salvage value of $$50,000.$ Pelican uses straight$-$line depreciation. In early January of $2023,$ Pelican took advantage of the hot real estate market and sold the building for $$650,000.$

Required: Prepare the journal entry to record the sale, including any gain or loss that should be recognized. Show calculations for the accumulated depreciation balance and for the gain or loss amount.

$3.$ Company Oriole makes most of its sales on account. In their most recent fiscal year, the company recorded sales of $$5,780,000$; during the year, they wrote off customer accounts in the amount of $$147,000$ as uncollectible. At the beginning of the year, the balance in Allowance for Doubtful Accounts was a credit of $$90,000.$ At year$-$end, the balance in accounts receivable was $$860,000.$

a$.$ Assume that Oriole uses the percentage of sales method to estimate bad debts and that their experience indicates that $2\mathrm{.}8\%$ of sales will turn out to be uncollectible. Prepare the adjusting entry to record bad debts.

b$.$ As a separate case, assume that Oriole uses the percentage of receivables method and that they estimate that $3\mathrm{.}2\%$ of outstanding receivables will become uncollectible. Prepare the adjusting entry in this case.