1. Bullock Co. purchased a beauty salon five years ago at a price of $20,000. At the time of the purchase, Bullock expected the salon to last for twenty years. Assuming straight-line depreciation, what is the current book value of the salon?

A. $20,000 B. $15,000 C. $5,000 D. $0 E. None of the above.

2. Bullock Co. purchased a beauty salon five years ago at a price of $20,000. At the time of the purchase, Bullock expected the salon to last for twenty years. Assuming straight-line depreciation, what is the tax on the sale if Bullock sold the salon today for $17,000? Assume a 40% tax rate. A. $800 B. $5,000 C. $15,000 D. $17,000 E. $6,800