1.Trouble Company purchased equipment on January 1, 2016, for $60,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life.

Compute depreciation expense for 2016 using the straight-line method of depreciation.

2. Adrianes Grocery Store had a beginning inventory of $14,000 and an ending inventory of $19,000. Net sales during the year amounted to $78,000 and gross profit was $12,000. The inventory turnover ratio was: