Reference no: EM132811223

Problem 1: In June, Kipper Ltd. received a $6,000 cash payment for work billed the previous month. The company replanted a clear-cut area of northern Alberta for which it sent out an invoice for $25,000. At the beginning of the month the company had $2,000 of trees for planting. During the month the company purchased $4,000 more, and at the end of the month it was left with trees that had cost $1,000. The company's expenses were $1,000 in out of rent for its office and $3,000 in other expenses. Amortization on the truck and office equipment was calculated to be $500. The income tax rate is 10%. The original expected life of the truck and office equipment was 5 years with no residual value and the amortization expenses was based on the question straight-line model. The original cost of the truck and office equipment was

Select one:

a. $20,000

b. $2,000

c. none of the listed answers are correct

d. $6,000

e. $24,000