Disc Company Purchased Equipment at the Beginning of 2010 for $200,000

question 58

Multiple Choice

Disc Company purchased equipment at the beginning of 2010 for $200,000. The company decided to depreciate the equipment over an 5-year period using the straight-line method. The company estimated the equipment's salvage value at $20,000. The journal entry to record depreciation expense for 2011 is a debit to:

• A) depreciation expense and a credit to accumulated depreciation for $40,000.
• B) accumulated depreciation and a credit to equipment for $40,000.
• C) depreciation expense and a credit to equipment for $36,000.
• D) depreciation expense and a credit to accumulated depreciation for $36,000.

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Definitions:

Social Exchange Theory

A psychological theory proposing that human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives.

Altruism

A selfless concern for the well-being of others without expectation of reward or recognition.

Unselfishly

Acting with regard for the welfare of others rather than oneself; showing selflessness.

Welfare of Others

The health, happiness, and fortunes of other people considered collectively.