Martin Company purchases a machine at the beginning of the year at a cost of $60,000. The machine is depreciated using the double-declining-balance method. The machine’s useful life is estimated to be 4 years with a $5,000 salvage value. Depreciation expense in year 4 is:

A company used straight-line depreciation for an item of equipment that cost $12,000, had a salvage value of $2,000 and a five-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $1,200 but its total useful life remained the same. Determine the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life:

The issue price of bonds is found by computing the future value of the bond’s cash payments, discounted at the market rate of interest.

The employer should record deductions from employee pay as:

An advantage of lease financing is the lack of an immediate large cash payment for the leased asset.

Term bonds are scheduled for maturity on one specified date, whereas serial bonds mature at more than one date.

The times interest earned ratio is calculated by dividing interest expense by income before interest expense and income taxes.

Obligations not due within one year or the company’s operating cycle, whichever is longer, are reported as current liabilities.

An asset’s book value is $36,000 on January 1, Year 6. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $25,000, the company should record:

The phrase capital-intensive refers to companies with large amounts invested in plant assets.