1............Knight Company purchased a new machine on May 1, 2014 for $100,000.At the time of acquisition, the machine was estimated to have a useful life of ten years and an estimated salvage value of $4,000.The company has recorded monthly depreciation using the straight-line method.On March 1, 2023, the machine was sold for $12,000.What should be the loss recognized from the sale of the machine?

Select one:

a.No loss; a gain is realized.

b.$6,400

c.$8,000

d.$11,200

e.$3,200

2.....Which of the following is not considered in calculating depreciation using the Units-of-Output method?

Select one:

a.Salvage Value

b.Useful life in years

c.Number of units produced each period

d.Purchase Price

e.Cost of any modifications that allow for more units to be produced.

3......A company purchases a machine in 2016 and ignores the estimated salvage value in computing annual depreciation.The 2016 Net Income will be overstated given the use of which method(s)?

Select one:

a.Both Straight-line method and Units-of-Output method

b.Units-of-Output method, but not Straight-line method

c.Straight-line method, but not Units-of-Output method

d.Neither Straight-line method nor Units-of-Output method

4.......Frey, Inc. purchased a machine for $500,000 on January 2, 2017.The machine has an estimated useful life of 5 years and a salvage value of $50,000.The machine is being depreciated using the sum-of-the-years'-digits method.The December 31, 2018 asset balance, net of accumulated depreciation, should be:

Select one:

a.$320,000

b.$230,000

c.$270,000

d.$180,000

e.$200,000

5.......Equipment was purchased at the beginning of 2015 for $206,000. At the time of its purchase, the equipment was estimated to have a useful life of seven years and a salvage value of $24,000. The equipment was depreciated using the straight-line method of depreciation through 2017. At the beginning of 2018, the estimate of useful life was revised to a TOTAL life of eight years (to 1/1/23) and the expected salvage value was changed to $15,000. The amount to be recorded for depreciation for 2018, reflecting these changes in estimates, is:

Select one:

a.$20,400

b.$19,800

c.$22,800

d.$25,600

e.$22,600

6...During the year, the Jackson Company reported a decrease in liabilities of $34,700. For the year, revenues were $131,800, expenses were $196,700, and dividends were $73,000. During the year, $17,000 in common stock was issued. There were no other changes in equity. What was the decrease in assets for the year?

Select one:

a.$86,900

b.$154,900

c.$81,900

d.$25,100

e.$155,600