Reference no: EM13582857

1.Maryland Company offers a bonus plan to its employees equal to 2% of net income. Maryland's net income is expected to be $959,000. The amount of the employee bonus expense is estimated to be:

• $19,571
• $19,180
• $19,380
• $20,380
• $18,804

2.A company discarded a display case originally purchased for $8,500. The accumulated depreciation was $6,700. The company should recognize a(an):

• $1,800 gain.
• $8,500 loss.
• $6,700 loss.
• $0 gain or loss.
• $1,800 loss.

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3.A company purchased a cash register on January 1 for $5,400. This register has a useful life of 10 years and a salvage value of $400. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method?

• $1,080.
• $1,000.
• $500.
• $800.
• $864.

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4.During August, Arena Company sells $346,000 in product that has a one year warranty. Experience shows that warranty expenses average about 3% of the selling price. The warranty liability account has a balance of $11,800 before adjustment. Customers returned product for warranty repairs during the month that used $8,400 in parts for repairs. The entry to record the customer warranty repairs is:

• Debit Estimated Warranty Liability $8,400; credit Parts Inventory $8,400.
• Debit Warranty Expense $6,980; credit Estimated Warranty Liability $6,980.
• Debit Warranty Expense $8,400; credit Estimated Warranty Liability $8,400.
• Debit Estimated Warranty Liability $10,380; credit Parts Inventory $10,380.
• Debit Warranty Expense $10,380; credit Estimated Warranty Liability $10,380.