36. A change in the estimated useful life of equipment requires A) a retroactive change in the amount of periodic depreciation recognized in previous years. B) that no change be made in the periodic depreciation so that depreciation amounts are comparable over the life of the asset. C) that the amount of periodic depreciation be changed in the current year and in future years D) that income for the current year be increased. 37. A loss on disposal of a plant asset is reported in the financial statements A) in the Other Revenues and Gains section of the income statement. B) in the Other Expenses and Losses section of the income statement C) as a direct increase to the capital account on the balance sheet. D) as a direct decrease to the capital account on the balance sheet. 38. Cost allocation of an intangible asset is referred to as A) amortization B) depletion C) accretion D) capitalization 39. Which one of the following payroll taxes is not included in the payroll tax expense entry for the employer? A) FICA tax B) Federal income tax C) Federal unemployment tax D) State unemployment tax 40. On January 1, 20-Waterway Corporation issued $5,000,000, 10-year, 8% bonds at 104. Interest is payable annually on January 1. The journal entry to record this transaction on January 1, 20-- is A) Cash 5,000,000 Bonds Payable 5,000,000 B) Cash 5,200,000 Bonds Payable 5,200,000 C) Premium on Bonds Payable 200.000 Cash 5,000,000 Bonds Payable 5,200,000 D) Cash 5,200,000 Bonds Payable Premium on Bonds Payable 5,000,000 200,000 41. The discount on bonds payable or premium on bonds payable is shown on the balance sheet as an adjustment to bonds payable to arrive at the carrying value of the bonds. Indicate the appropriate addition or subtraction to bonds payable Premium on Discount on Bonds Pavable Bonds Pavable Add b Dedua Add Add Deduct d Dedua Dedua a Add c 42. Bond interest PAID is A) higher when bonds sell at a discount and lower when bonds well at a premium B) the same whether bonds sell at a discount or a premium C) higher when bonds sell at a discount D) lower when bonds sell at a premium