The Delivery Equipment Account in the Ledger of a Co

question 48

Multiple Choice

The Delivery Equipment account in the ledger of A Co has a balance of $17 600 which is the cost of two 2^nd hand trucks purchased on 1 January 2015. The Accumulated Depreciation Delivery Equipment account has a balance on 31 December 2016 of $8000, before adjusting entries. No additional delivery trucks have been acquired or sold. The residual value of each truck is estimated to be $800 and the straight-line depreciation method is used. What is the necessary adjusting entry to record annual depreciation on 31 December 2017?
Debit Credit

• A) Depreciation exp. $8000 Delivery equipment $8000
• B) Accumulated depr. $4000 Delivery equipment $4000
• C) Depreciation exp. $8000 Cash at bank $8000
• D) Depreciation exp. $4000 Accumulated depr. $4000

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Definitions:

Outside Supplier

An external entity that provides goods or services to a company, often used in the context of manufacturing or procurement.

Operating At Capacity

A situation where a business is utilizing all available resources to produce goods or services at maximum output.

Usual Selling Price

The regular or typical price at which goods or services are sold in the market under normal conditions.

Outside Supplier

A third-party entity that provides goods or services to a business, typically not affiliated with the purchasing company.