On April 2, 2017, Victor, Inc. acquired a new piece of filtering equipment. The cost of the equipment was $160,000 with a residual value of $20,000 at the end of its estimated useful lifetime of 4 years.

Assume that in its financial statements, Victor uses straight-line depreciation and the half-year convention. Depreciation recognized on this equipment in 2017 and 2018 will be:

Select one:

a. $40,000 in 2017 and $30,000 in 2018.

b. $23,333 in 2017 and $30,000 in 2018.

c. $17,500 in 2017 and $35,000 in 2018.

d. $20,000 in 2017 and $35,000 in 2018.

2.

[The following information applies to the questions displayed below.]

The average employee of Girard Corporation earns gross pay of $75,000 per year. The following table shows the relative size of various payroll amounts by expressing each as a percentage of total wages and salaries expense (gross pay):

Workers compensation insurance		6	%
Social security and Medicare (employee's share and employer's share combined)		16	%
Pension and other postretirement costs expense (paid by employer)		5	%
Personal income taxes withheld		9	%
Unemployment taxes expense		2	%

In addition, Girard pays $425 per month per employee for group health insurance.

Which of the following represents the second largest payroll related expense incurred by Girard?

Select one:

a. Group health insurance premiums.

b. Income taxes expense.

c. The employer's share of social security taxes and Medicare taxes.

d. Wages and salaries expense

3.

Stone Corporation has 25 employees and incurs total wages and salaries expense of $900,000 per year. The following table shows various payroll amounts as a percentage of this annual wage and salaries expense: In addition, Stone provides group health insurance for its entire workforce. The cost of this insurance is $350 per month per employee.

Workers compensation insurance		5	%
Social security and Medicare (employees' share and employer's share combined)		15.3	%
Pension and other postretirement costs expense (paid by employer)		5	%
Personal income taxes withheld		10	%
Unemployment taxes expense		2	%

In addition, Stone provides group health insurance for its entire workforce. The cost of this insurance is $350 per month per employee.

Assume that the federal government implements a 10% payroll tax upon employers to finance health insurance for all citizens and residents. Stone will pay this tax instead of purchasing group health insurance. This will cause Stone 's total annual payroll-related expenses to:

Select one:

a. Decrease by $15,000.

b. Increase by $15,000.

c. Decrease by $32,500.

d. No change, because payroll taxes are withheld from employees' pay

4.

On December 1, Year 1, Bradley Corporation incurs a 15-year $200,000 mortgage liability in conjunction with the acquisition of an office building. This mortgage is payable in monthly installments of $2,400, which include interest computed at the rate of 12% per year. The first monthly payment is made on December 31, Year 1.

Over the 15-year life of the mortgage, the total amount Bradley will pay for interest charges is:

Select one:

a. $232,000.

b. $360,000.

c. $200,000.

d. $432,060