Woods, Inc B) C) D)

question 28

Multiple Choice

Woods, Inc. purchased a new engine for a long-distance truck in January, 2017. The engine cost $380,000 and should give the truck an additional 400,000 miles of life. Inadvertently, the engine was charged to truck repairs expense. The error was found in December, 2018. The company records depreciation based on miles driven with no salvage value. Miles driven in 2017 were 85,000 and 70,000 in 2018. Which one of the following entries properly corrects all the errors through December 31, 2018? (Ignore income taxes.) (Round any intermediate calculations and your final answers to the nearest dollar.)

• A) \[\begin{array} { |l | r | r | }
• \hline \text { Truck } & 380,000 & \\
• \hline \text { Accumulated Depreciation-Truck } & & 66,500 \\
• \hline \text { Retained Earnings } & & 313,500 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { |l | r | r | }
• \hline \text { Retained Earnings } & 299,250 & \\
• \hline \text { Depreciation Expense-Truck } & 80,750 & \\
• \hline \text { Truck } & & 380,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Truck } & 380,000 & \\
• \hline \text { Depreciation Expense (2017)-Truck } & 80,750 & \\
• \hline \text { Retained Earnings } & & 460,750 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Truck } & 380,000 & \\
• \hline \text { Depreciation Expense-Truck (2018) } & 66,500 & \\
• \hline \text { Accumulated Depreciation-Truck } & & 147,250 \\
• \hline \text { Retained Earnings } & & 299,250 \\
• \hline
• \end{array}\]

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