When a company buys machinery for $80,000 and 25% is paid for with cash and the 75% is financed by a note payable, the following are the effects on assets, liabilities and shareholders equity respectively *

1 point

assets increase by $80,000 and liabilities increase by the same amount

total assets increase by $60,000 and liabilities increase by the same amount

assets increase by $80,000 and liabilities increase $60,000 and shareholders equity increases by $20,000

total assets increase by $60,000 and liabilities increase by $80,000 and shareholders equity decreases by $20,000

On January 1, 2011, the Worchester Company paid $8,000 for January, February, March and Aprils rent in advance. The company recorded this transaction by increasing the balance in the prepaid rent account. What will be the balance in the prepaid rent account as of March 31, 2011? *

1 point

$0

$2,000

$4,000

$6,000

For an asset owned for more than one year, the depreciation charge for the year, calculated using the reducing-balance basis at the rate of 35%, would be arrived at as follows... *

1 point

35% x cost of the asset.

35% x (cost of the asset - accumulated depreciation).

35% x accumulated depreciation.

35% x (cost of the asset + accumulated depreciation).