A company purchased factory equipment on April 1, 2018 for $160,000. It is estimated that the equipment will have a $20,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2018 is.

a. $16,000.
b. $14,000.
c. $10,500.
d. $12,000.

Wallis company manufactures only one product and uses a standard cost system. the company uses a predetermined plantwide overhead rate that relies on direct labor-hours as the allocation base. all of the company's manufacturing overhead costs are fixed—it does not incur any variable manufacturing overhead costs. the predetermined overhead rate is based on a cost formula that estimated $2,886,000 of fixed manufacturing overhead for an estimated allocation base of 288,600 direct labor-hours. wallis does not maintain any beginning or ending work in process inventory.

At april 1, 2019, the food and drug administration is in the process of investigating allegations of false marketing claims by hulkly muscle supplements. the fda has not yet proposed a penalty assessment. hulkly’s fiscal year ends on december 31, 2018. the company’s financial statements are issued in april 2019. required: for each of the following scenarios, determine the appropriate way to report the situation. 1. management feels an assessment is reasonably possible, and if an assessment is made an unfavorable settlement of $13 million is reasonably possible. 2. management feels an assessment is reasonably possible, and if an assessment is made an unfavorable settlement of $13 million is probable. 3. management feels an assessment is probable, and if an assessment is made an unfavorable settlement of $13 million is reasonably possible. 4. management feels an assessment is probable, and if an assessment is made an unfavorable settlement of $13 million is probable.

Walsh company manufactures and sells one product. the following information pertains to each of the company’s first two years of operations: variable costs per unit: manufacturing: direct materials $ 25 direct labor $ 12 variable manufacturing overhead $ 5 variable selling and administrative $ 4 fixed costs per year: fixed manufacturing overhead $ 400,000 fixed selling and administrative expenses $ 60,000 during its first year of operations, walsh produced 50,000 units and sold 40,000 units. during its second year of operations, it produced 40,000 units and sold 50,000 units. the selling price of the company’s product is $83 per unit. required: 1. assume the company uses variable costing: a. compute the unit product cost for year 1 and year 2. b. prepare an income statement for year 1 and year 2. 2. assume the company uses absorption costing: a. compute the unit product cost for year 1 and year 2. b. prepare an income statement for year 1 and year 2. 3. reconcile the difference between variable costing and absorption costing net operating income in year 1.