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Rea's board of directors. Rea reported net income of $500,000
for 2005, and paid dividends of $150,000. In its December 31,
2005, balance sheet, what amount should Well report as
investment in Rea?
Question 3
On December 31, 2004, Roth Co. issued a $10,000 face value
note payable to Wake Co. in exchange for services rendered to
Roth. The note, made at usual trade terms, is due in nine
months and bears interest, payable at maturity, at the annual
rate of 3%. The market interest rate is 8%. The compound
interest factor of $1 due in nine months at 8% is .944. At what
amount should the note payable be reported in Roth's
December 31, 2004 balance sheet?
Question 4
Rye Co. purchased a machine with a four-year estimated
useful life and an estimated 10% salvage value for $80,000 on
January 1, 2003. In its income statement, what would Rye
report as the depreciation expense for 2005 using the double
declining balance method?
Question 5
Turtle Co. purchased equipment on January 2, 2002, for
$50,000. The equipment had an estimated five-year service life.
Turtle's policy for five-year assets is to use the 200% double
declining depreciation method for the first two years of the
asset's life, and then switch to the straight-line depreciation
method. In its December 31, 2004 balance sheet, what amount