Question
4. Which of the following indicators will decline if fixed assets are sold at a price lower than the book value? a. Total current assets
4. Which of the following indicators will decline if fixed assets are sold at a price lower than the book value?
a. Total current assets
b. Current ratio
c. Net profit
d. Net working capital
5. Stanford Company leases a special purpose equipment from Vincent Company through long-term lease, which is classified as operating lease. After the release of the financial report of that year, it was found that the lease should be classified as financial lease. This discovery will lead to changes in the following indicators of Stanford, except:
a. Debt equity ratio
b. Turnover rate of accounts receivable
c. Turnover rate of fixed assets
d. Net profit margin
6. Rye Company purchased a piece of equipment with a value of $80000 and an estimated service life of 4 years on January 1, 2012. The residual value of the equipment is 10% of the purchase amount. It adopts the double declining balance method for its depreciation. What is the depreciation amount of the equipment in 2014?
a.$9,000
b.$10,000
c.$18,000
d.$20,000
(no need explanation ,just need final choice)
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