1. Stine Company purchased machinery with a list price of $64,000. They were given a 10% discount by the manufacturer. They paid $400 for shipping and sales tax of $3,000. Stine estimates that the machinery will have a useful life of 10 years and a residual value of $20,000. If Stine uses straight-line depreciation, annual depreciation will be

$4,100.

$6,100.

$4,072.

$3,760.

2. On January 1, a machine with a useful life of five years and a residual value of $40,000 was purchased for $120,000. What is the depreciation expense for year 2 under the double-declining-balance method of depreciation?

$23,040.

$48,000.

$28,800.

$38,400.

3. Sparks Company received proceeds of $423,000 on 10-year, 8% bonds issued on January 1, 2013. The bonds had a face value of $400,000, pay interest annually on December 31st, and have a call price of 102. Sparks uses the straight-line method of amortization. What is the carrying value of the bonds on January 1, 2015?

$381,600

$418,400

$400,000

$420,700

4. S. Lawyer performed legal services for E. Corp. Due to a cash shortage, an agreement was reached whereby E. Corp. would pay S. Lawyer a legal fee of approximately $15,000 by issuing 8,000 shares of its common stock (par $1). The stock trades on a daily basis and the market price of the stock on the day the debt was settled is $1.80 per share. Given this information, the best journal entry for E. Corp. to record for this transaction is

Legal Expense		14,400
	Common Stock		8,000
	Paid-in Capital in Excess of Par - Common		6,400

Legal Expense		15,000
	Common Stock		15,000

Legal Expense		15,000
	Common Stock		8,000
	Paid-in Capital in Excess of Par - Common		7,000

Legal Expense		14,400
	Common Stock		14,400

5.Jahnke Corporation issued 8,000 shares of