37. On January 1, 2014, $2.000 000, 10-year, 10% bonds were issued for$1,940,000. Interest is paid annually on January 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, the monthly amortization amount is A) $6,000. B) $500. C) $1,616 D) $19,400. 38. If total liabilities decreased by $4,000, then A) stockholders' equity must have decreased by $4,000. B) assets and stockholders' equity each increased by $2,000. C) assets must have increased by $4,000. D) assets must have decreased by $4,000, or stockholders' equity must have increased by $4,000. 39. Rains Company purchased equipment on January 1 at a list price of $75,000, with credit terms 2/10, n30' Payment was made within the discount period. Rains paid S3, 750 sales tax on the equipment, and paid installation charges of $1,320. Prior to installation, Rains paid $3.000 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment? A) $75,750. B) $81,570. C) $78,750. D) $83,070. 40, Ace Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock? A) $5,000 in total B) $50 per share C) $50,000 in total D) $0.50 per share 4I. Net income will result if gross profit exceeds A) purchases B) operating expenses C) cost of goods sold plus operating expenses. D) cost of goods sold. Version 2 Page 9