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
should Turtle report as accumulated depreciation for
equipment?
Question 6
During 2005, Jase Co. incurred research and development
costs of $136,000 in its laboratories relating to a patent that
was granted on July 1, 2005. Costs of registering the patent
equaled $34,000. The patent's legal life is 17 years, and its
estimated economic life is 10 years. In its December 31, 2005,