1. How are goods that are purchased for resale at a later date recorded in the financial statements?

a. as inventory

b. as prepaid expenses

c. as cost of goods sold

d. as operating expenses

2. A piece of equipment was recently purchased for $10,600 on April 1. It is estimated that it will last for 10 years and have a residual value of $600. The depreciation expense to be recognized in the year of acquisition, assuming a December year end, would be

a. 1,000

b. 750

c. 662.50

d. 833.33