1. A company purchased factory equipment on April 1, 2018 for $160,000. It is estimated that the equipment will have a $20,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2018 is

a) $16,000

b) $10,500

c) $12,000

d) $14,000

2. Hilltop DX Company started the year with total assets of $300,000 and total liabilities of $240,000. During the year, the business recorded $630,000 in revenues, $420,000 in expenses and paid dividends of $60,000. Stockholder's equity at the end of the year was

a) $360,000

b) $90,000

c) $300,000

d) $240,000

3. Cummins Engine company purchased 1,000 shares of treasury stock for $12 per share. This transaction:

a) decreases common stock issued by 1,000 shares

b) decreases common stock authorized by 1,000 shares

c) decreases common stock outstanding by 1,000 shares

d) has no effect on the reported number of shares