On January 1, 2016, Woodstock, Inc. purchased a machine costing $40,000. Woodstock also paid $1,000 for transportation and installation. The expected useful life of the machine is 6 years and the residual value is $5,000. How much is the annual depreciation expense assuming use of the straight-line depreciation method? a. $6, 100. b. $6,000. c. $5, 950. d. $5, 750. Which of the following best describes the objective of depreciation? a. To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. b. To estimate the remaining useful life of the asset. c. To report the asset on the balance sheet at the estimated amount for which the asset could be sold on the balance sheet date. d. To estimate the current market value of the asset. Which of the following would not be classified as property, plant and equipment on a balance sheet? a. Land held for investment. b. Equipment used in the manufacturing process. c. A building used as corporate headquarters. d. A natural resource being mined. Which of the following transactions will not increase the cash ratio? a. Receiving cash from a common stock issue. b. Refinancing a current liability with long-term debt. c. Using cash to purchase a two-month treasury bill. d. Collecting an account receivable