QUESTIONS On January 1, 2018, Red Inc, purchased a delivery equipment for $88,000. The equipment's estimated residual value is $8,000, and its estimated useful life is 8 years. On December 31, 2020, what was the net book value of the equipment using the straight-line method of depreciation? 68,000 55,000 58,000 66,000 QUESTION 6 Purple Company's retained earnings increased $6,000 during the current year. What was Purple's current year net income or loss given that Purple declared $2,000 of dividends during this year? Net income was $12,000 Net loss was $8,000. Net loss was $12,000. Net Income was $8,000. QUESTION 7 Suppose you have a winning lottery ticket and the state gives you the option of either taking $10,000 five years from now or taking $7,000 today. Suppose the market annual interest rate is 6%. Which one would you choose? A. Taking $10,000 five years from now The two options are equivalent Taking $7000 today QUESTION 8 ABC Corporation issues 4,000, 10-year, 8%, $1,000 bonds at 97 (97% of par value). The journal entry to record the issuance will show a debit to Discount on Bonds Payable for $120,000 credit to Cash for $3,880,000 credit to Bonds Payable for $3,880,000 debit to Cash of $4,000,000