The cost of the equipment in the prior question was most likely:

a. $200,000.

b. $300,000.

c. $400,000.

d. Some undeterminable amount.

A truck was purchased at a cost of $23,000. The estimated useful life and salvage value was 8 years and $3,000. After 4 years of straight-line depreciation, the asset's useful life was revised to 6 years with no change in the estimated salvage value. The depreciation expense in year 5 is:

a. $2,875.

b. $5,000

c. $5,750.

d. $11,500.

_. The gross margin ratio:

a. Is also called the net profit ratio.

b. Indicates the percent of sales revenue remaining to cover operating expenses.

c. Indicates the % of sales revenue needed to cover all expenses.

d. Indicates the margin of safety below which the firm cannot be profitable.

On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

a. $0.

b. $75.

c. $225

d. Some other amount.