Minor Company Installs a Machine in Its Factory at the Beginning

question 122

Multiple Choice

Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000.The machine's useful life is estimated to be 5 years,or 300,000 units of product,with a $15,000 salvage value.During its first year,the machine produces 64,500 units of product.What journal entry would be needed to record the machines' first year depreciation under the units-of-production method?

• A)Debit Depletion Expense $25,800;credit Accumulated Depletion $25,800.
• B)Debit Depletion Expense $29,025;credit Accumulated Depletion $29,025.
• C)Debit Depreciation Expense $29,025;credit Accumulated Depreciation $29,025.
• D)Debit Depreciation Expense $25,800;credit Accumulated Depreciation $25,800.
• E)Debit Amortization Expense $24,000;credit Accumulated Amortization $24,000.

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