1. Bengal Company purchased equipment and these costs were incurred:

Cash price $24,000

Sales tax $1,000

Insurance during transit $300

Installation and testing $200

What amount should be recorded as the cost of the equipment?

A. $24,000

B. $25,000

C. $25,200

D. $25,500

2. Equipment with a useful life of 5 years was purchased for $20,000 on January 1. A salvage of $2,000 was estimated. What is the depreciation expense for the first year using straight-line method?

A. $3,600

B. $4,000

C. $4,400

D. $5,000

3. Equipment with a useful life of 5 years was purchased for $20,000 on January 1. A salvage of $2,000 was estimated. What is the depreciation expense for the first year using double declining method?

A. $3,600

B. $7,200

C. $8,000

D. $10,000

4. An asset with a cost of $50,000 and accumulated depreciation of $35,000 is sold for $17,000. Which of the following is included in the entry?

A. A debit to Gain on Sale for $2,000

B. A credit to Gain on Sale for $2,000

C. A debit to Loss on Sale for $2,000

D. A credit to Loss on Sale for $2,000