Minor Company Installs a Machine in Its Factory at the Beginning

question 11

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.Depreciation Expense = [($135,000 - $15,000)/300,000] * 64,500 = $25,800

---

Definitions:

Electroencephalograph

An instrument used to record the electrical activity of the brain, typically via electrodes placed on the scalp.

Brain-Wave Activity

The patterns of neuronal electrical oscillations in the brain, detectable with techniques such as EEG, and associated with different states of consciousness.

Epilepsy

A neurological disorder marked by sudden recurrent episodes of sensory disturbance, loss of consciousness, or convulsions, associated with abnormal electrical activity in the brain.

Reticular Formation

A system in the midbrain comprising a diffuse collection of neurons involved in stereotyped patterns of behavior such as walking, sleeping, and turning to attend to a sudden noise.