a. May have a contract specifying the division of profits among the owners.

b. Has an unlimited life.

c. Can easily transfer ownership interest with no restriction.

Use the following format to indicate (with a "yes" or "no") whether or not a characteristic applies to each type of business organization

4. A company used straight-line depreciation for an item of equipment that cost $12,000, had a salvage value of $2,000 and had a five-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $1,200 and its total useful life was increased from 5 years to 6 years. Determine the amount of depreciation to be charged against the machine during each of the remaining years of its useful life:

A. $1,000; 13. $1,800; C. $1,467; D. $1,600

5. Halley Burton began a Web Consulting practice as a corporation and completed these transactions during September of the current year. Show the effects of the below transactions on the accounting equation of Web Consulting. Use the following format for your answers. The first item is shown as an example. Increase = I Decrease = D No effect = N

Sept 1 Invested $100,000 of his personal savings into a checking account opened in the name of the business and received stock in the corporation.

2 Rented office space and paid $1„200 cash for the month of September.

Purchased office equipment for $30,000, paying $8,000 cash and agreeing to pay the balance in one year.

4 Purchased office supplies for $750 cash.

8 Completed work for a client and immediately collected $2,700 cash for the services.

15 Completed $3,600 services for a client on credit.

20 Received $3,600 from a client for the work completed on September 15.

30 Paid the office secretary's monthly salary, $3,000 cash.

30 Web Consulting paid a $2,000 cash dividend.