Q1: On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. Marino uses the straight-line method. On January 1, Year 3, Marino's accounting records contained the balances shown in the following financial statements mode Balance sheet Assets Income Statement Cash | + | Truck | - | Acc. Dep. | = | Liab. | + | Equity | Rev. 1-1 Exp. | = | Net Inc. 25,000 48,00e Cash Flow Statement NA 20,900 NA NA- NA Also, on January 1, Year 3 the company paid $10,000 to replace an engine that extended the useful life of the asset from a total of four years to a total of seven years. Based on this information, the balance in the amount of depreciation expense shown on the Year 3 income statement is A. $9200 B. $6000 C. $5200 D. $2000 Q2: On January 1, Year 1, Gemstone Mining Company (GMC) paid $10,500,000 cash to purchase the rights to extract raw stone from a surface pit estimated to hold 50,000 pounds of useable material. GMC extracted 10,000 pounds of stone in Year 1, 20,000 pounds of stone in Year 2, and 25,000 pounds of stone in Year 3. The rights to the surface pit were expected to have a $500,000 salvage value at the end of Year 3. Which of the following statements models shows how the purchase will affect GMC's financial statements? Balance sheet Assets Income Statement Cash Flow Statement (1e,5ee,e0e) OA (10,5ee,e0e) IA (10,500,000) IA (10,500,000) OA Stone Cash Reserves | = | Liab. | + | Equity | Rev. 1-1 Exp. | | Net Inc. NA NA NA NA NA NA 1-1 NA I- NA -NA- NA NA NA NA NAI= B. (10,500,e00)10,5ee,e00NA+