Multiple Choice 1. The cost of a factory machine includes all of the following costs except a. invoice price less discount taken. b. sales tax and insurance during shipping. c. three-year insurance policy on the machine. d. testing and installation cost. On January 1, a machine with a useful life of 5 years and a salvage value of $8,000 was purchased for $160,000. What is the depreciation expense in year 2 under the double declining-balance method? a. $38,400 b. $36,480 c. $25,600 d. $24,320 3. An asset that cost $80,000 and has accumulated depreciation of $60,000 is sold for $12,000. The journal entry would include a debit to Loss on Disposal of $20,000. b. debit to Loss on Disposal of $8,000. c. credit to Gain on Disposal of $8,000. d. credit to Accumulated Depreciation for $60,000. The exclusive right to reproduce and sell an artistic or published work is called a a. patent. b. trademark. c. license. d. copyright. Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as a. capital expenditures b. expense expenditures. c. ordinary repairs. d. revenue expenditures