And installation cost, $2, 500. At what amount will the equipment be recorded on a balance sheet? a. $57, 500. b. $54,000. c. $51,000. d. $53, 500. Which of the following describes the effect of recording deprecation expense at year-end? a. Net income decreases and total assets decrease. b. Total assets decrease and stockholders' equity is not affected. c. Net income decreases and total assets increase. d. Stockholders' equity is not affected and net income decreases Phipps Company borrowed $25,000 cash on October 1, 2016, and signed a nine-month, 8% interest-bearing note payable with interest payable at maturity. The amount of interest expense to be reported during 2017 is which of the following? a. $1,000 b. $300 c. $500 d. $750 Which method of depreciation results in periodic depreciation expense that fluctuates from one period to the next, not necessarily in a steadily upward or downward direction? a. Straight-line. b. Units-of-production. c. Modified accelerated cost recovery system. d. Declining balance. Which of the following ratios is not considered to be a test of profitability? a. Current ratio