On January 1, 2016, a company placed into service equipment that had a total capitalized cost of $1,200,000. The equipment had an estimated salvage value of $60,000 and an estimated useful life of 6 years. What is the amount of accumulated depreciation at December 31, 2017, if the straight-line method of depreciation is used?

	a.	$380,000.
	b.	$400,000.
	c.	$200,000.
	d.	$190,000.

2.

A company made a $500 ordinary repair to a piece of equipment. The accountant debited this amount to the asset account, Equipment and credited Cash. Was this the correct entry and if not, why not?

	a.	No, the correct entry would be a debit to Maintenance and Repairs Expense and a credit to Cash.
	b.	Yes, this was the correct entry.
	c.	No, the correct entry would be a debit to Cash and a credit to Maintenance and Repairs Expense.
	d.	No, the correct entry would be a debit to Service Revenue and a credit to Cash.

A company purchases a new delivery truck for $45,000. The sales taxes are $2,500. The logo of the company is painted on the side of the truck for $1,200. The trucks annual operating license is $120. Before it can be used, the truck undergoes safety testing for $220. What does Arnold record as the acquisition cost of the new truck?

	a.	$48,920.
	b.	$49,040.
	c.	$46,920.
	d.	$47,500.