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Multiple Choice (2.5 points each) 1. During May 2022, a company spend $14,000 cash on ordinary maintenance of its delivery trucks. These maintenance costs should have been recorded as debits to 'Maintenance Expense' but the company mistakenly capitalized these costs instead. Which of the following is true? a. Total Assets are overstated as of May 31, 2022 and May 2022 Net Income is overstated. b. Total Assets are overstated as of May 31, 2022 and May 2022 Net Income is properly stated. c. Total Assets are understated as of May 31, 2022 and May 2022 Net Income is understated. d. Both Total Assets as of May 31, 2022 and May 2022 Net Income are properly stated. 2. On May 26, 2022, Robin Company sells a piece of its manufacturing equipment for $80,000 cash. Robin had initially purchased the equipment for $200,000 in a prior period. The company had recorded $140,000 in depreciation for this piece of equipment as of the date of sale. Robin Company will record a related to the sale. a. $80,000 gain b. $20,000 gain c. $60,000 loss d. $120,000 loss 3. BIG Corporation purchases new equipment for $2,800,000 on January 1, 2022. BIG estimates that the equipment has a $120,000 residual value and a useful life of 10 years. BIG uses the straight-line method to record depreciation. Assume that on January 1, 2024, after 2 years, BIG realizes that the equipment remaining useful life is 5 years and a residual value is $160,000. A depreciation schedule would show_ depreciation expense for 2024. a. $528,000 b. $420,800 c. $300,571 d. $268,000 e. $263,000