1.

Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $189,000 with terms of 4/15, n/45. Payment was made within the discount period. Shipping costs were $4,500, which included $200 for insurance in transit. Installation costs totaled $11,200, which included $3,500 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the 10-ton draw press is:

a) $193,640

b) $198,640

c) $181,440

d) $197,140

10.

On January 1, 2016, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2017. Expenditures on the project were as follows:

January 1, 2016	$319,000
September 1, 2016	$468,000
December 31, 2016	$468,000
March 31, 2017	$468,000
September 30, 2017	$319,000

Dreamworld had $5,600,000 in 12% bonds outstanding through both years.

The average accumulated expenditures for 2017 by the end of the construction period was:

a) $2,042,000

b) $1,624,000

c) $1,019,250

d) $1,312,000

20. Broadway Ltd. purchased equipment on January 1, 2014, for $840,000, estimating a 7-year useful life and no residual value. In 2014 and 2015, Broadway depreciated the asset using the straight-line method. In 2016, Broadway changed to sum-of-years'-digits depreciation for this equipment. What depreciation would Broadway record for the year 2016 on this equipment? (Do not round your depreciation rate.)

a) $100,000

b) $120,000

c) $240,000

d) $200,000