221. The balance sheet of ABC reports total liabilities of $2,000,000. The debt to equity ratio is 2.5. What is ABC's stockholders' equity?

A) $800,000 B) $1,000,000 C) $320,000 D) $2,000,000

222. ABC issues $10 million in bonds on January 1, 2018. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds:

Date	Cash Paid	Interest Expense	Increase in Carrying Value	Carrying Value
1/1/2018				$8,640,967
6/30/2018	$300,000	$345,639	$45,639	8,686,606
12/31/2018	300,000	347,464	47,464	8,734,070
6/30/2019	300,000	349,363	49,363	8,783,433
12/31/2019	300,000	351,337	51,337	8,834,770

What is the stated annual rate of interest on the bonds? (Hint: Be sure to provide the annual rate rather than the six month rate.)

A) 6%. B) 3%. C) 8%. D) 4%.

223. ABC purchased equipment for $60,000 on January 1, 2018. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years.

Using the double-declining balance method, depreciation expense for 2018 would be:

A) $19,000. B) $24,000. C) $22,000. D) $20,000.

224. The Trueblood Criterion is used:
     1. By managers to maximize reported income
     2. By managers to smooth reported income
     3. By managers to make decisions
     4. By accountants to make rules for financial reporting

225. When a company makes an end-of-period adjusting entry that includes a credit to Prepaid Rent, the debit is usually made to:
     1. Rent Receivable. B) Cash.

C) Rent Expense. D) Rent Payable.