Use the following to answer questions 18 - 19 AD Enterprises purchased equipment for $400,000 on January 1, year 1. The equipment is expected to have a 4 year life, with a residual value of $50,000 at the end of its service life. 18. $. Using the double-declining balance method, determine depreciation expense for year 2 19. $__ Using the straight-line method, determine book value at the end of year 2. Use the following to answer questions 20-22 AJ Construction is in the process of closing its operations. It sold its 5-year-old Caterpillar 279C Compact Track Loader for $90,000. The loader originally cost $180,000 and had an estimated useful life of 8 years and an estimated residual value of $30,000. The company uses straight-line depreciation for all equipment. 20. $ Calculate the book value of the loader at the end of the 5th year. 21. $ What was the gain or loss on the sale of the loader at the end of the 5th year; (if loss, put-in front of your answer). 22. Record the sale of the loader at the end of the 5th year. Continued on the next page Use the following to answer questions 23 - 30 PMJ Corp. reported the following income statement results: Sales Sales returns & allowances Gross profit Operating expense Gain on sale of equipment Net income $800,000 2,000 344,700 215,300 4,000 94,900 23. $. Calculate Net sales Calculate Cost of Goods Sold Calculate operating income 26. $ Calculate Income before Income tax (IBT) Calculate income tax expense _ ___%. Calculate the gross profit margin (one decimal place) - _%. Calculate the profit margin (one decimal place) 30, $ Assume the company had a loss (instead of the gain) on the sale of equipment of $2,000; determine IBT. Use the following to answer questions 31 - 32 Last year T, Inc., had the following expenditures related to developing its trademark: General advertising costs Advertising specifically focused on trademark Legal fees to register trademark Legal fees for successful defense of new trademark Total $224,000 45,500 600 75.000 $344,600 During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all the above as costs of the trademark. Management contends that all the costs increase the value of the trademark and, therefore, should be capitalized. 31. Which of the above costs should NOT be capitalized? 32.$_ What is the total cost that should be capitalized to the trademark account