3 33. Income before depreciation and taves amounts to $150,000. Using straight-line depreciation, the current year's depreciation expense will be $22,000. Using double- declining-balance depreciation, the current year's depreciation expense will be $30,000 Assming a tax rate of 40%, what is the net cash saved income taxes by double- year's depreciation expense will be $22,000. Using double- a. $3,200 b. $4,800 c. $8,000 d. $12,00 34. In 2005, First Company purchase Second Company for $10,000,000 cash. At the time of purchase Second Company had $8,500,000 in assets and liabilities of $1,000,000. Afler two years, the value of the assets purchased from Second Company has increased in value to $9,500,000. The 2007 balance sheet for First Company should show goodwill of: a. $1,500,000 b. $2,500,000 $3,500.000 d. $4,500,000 35. On January 2, 2005, Kansas Corporation acquired equipment for $140,000. The estimated life of the equipment is 5 years or 20,000 hours. The estimated residual value is S40,000. What is the book value of the asset on December 31, 2006, if Kansas Corporation uses the straight-line method of depreciation? a. $56,000 b. $60,000 c. $80,000 d. $100,000 Section &:Reporting and Amalyzing Non-owner Financing, Current and Long-Term Liabilities 36. A company has a contingent loss that can be estimated and has a reasonably possible chance of occurrence. What reporting does the FASB require regarding this a It should be accrued and reported on the financial statements b. It should be reported in the notes to the financial statements c. It should be ignored until the actual loss materializes d. It should be accrued and reportod on the firancial statements and reported in the notes to the financial statements