1.A company used straight-line depreciation for an item of equipment that cost $16,500, had a salvage value of $4,000, and had a five-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $1,800 and its total useful life was increased from 5 years to 6 years. Determine the amount of depreciation to be charged against the machine during each of the remaining years of its useful life:
- $2,940.
- $2,450.
- $2,267.
- $1,500.
- $2,400.
2.A company's income before interest expense and taxes is $250,000 and its interest expense is $80,000. Its times interest earned ratio is:
3.13
1.00
2.81
1.81
0.32
The current FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $6,100 of an employee's pay. Assume that an employee earned $11,300. What is the amount of total unemployment taxes the employer must pay on this employee's wages?
Zero, since the employee's wages exceed the maximum of $6,100.
- $378.20.
- $90.40.
- $700.60.
- $610.20.
3.Company purchased a rope braiding machine for $198,250. The machine has a useful life of 8 years and a residual value of $10,500. It is estimated that the machine could produce 751,000 units of climbing rope over its useful life. In the first year, 105,500 units were produced. In the second year, production increased to 109,500 units. Using the units-of-production method, what is the amount of depreciation that should be recorded for the second year?
- $26,375.
- $27,850.
- $53,750.
- $27,375.
- $28,906.