QUESTION 28 Easton Company purchased a machine for $70,000 on January 1, 2020. It was estimated that the machine will have a salvage value of $14,000 at the end of its 5-year useful life and would be used a total of 40,000 hours during this time. If the actual number of machine hours used in 2020 was 4,000 hours and the units-of-activity method of depreciation is used, what is the amount of depreciation expense recorded in 2020? O A. $5,600 O B. $7,000 O C. $14,000 O D. $11,200 QUESTION 29 On January 1, 2019, Loveland Ski Company issued $1,000,000 of notes payable, of which $250,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2019 is O A. Current liabilities, $1,000,000. O B. Current liabilities, $250,000; Long-term liabilities, $750,000. O C. Long-term liabilities, $1,000,000. O D. Current liabilities, $500,000; Long-term liabilities, $500,000. QUESTION 26 Evergreen Inc. sold 10,000 shares of its $5 par value common stock for $25 per share. What is the effect of this transaction on the Common Stock account? O A. Increase Common Stock for $200,000. O B. Decrease Common Stock for $250,000. OC. Increase Common Stock for $50,000. OD. Increase Common Stock for $250,000. QUESTION 27 Which of the following is a disadvantage of financing by issuance of long-term bonds versus common stock? O A. Stockholder control is not affected. O B. Return on common stockholders' equity may be higher. O C. Debt financing reduces a company's solvency. O D. Tax savings result since interest is tax deductible. QUESTION 24 Tommy Caldwell invests $35,516.80 now for a series of $5,000 annual returns beginning one year from now. Tommy will earn 10% on the initial investment. What is the approximate number of annual payments Tommy will receive? O A. 13 O B.6 O c.7 OD. 10