Wickland Company Installs a Manufacturing Machine in Its Production Facility

question 99

Multiple Choice

Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000.The machine's useful life is estimated to be 5 years,or 400,000 units of product,with a $7,000 salvage value.During its second year,the machine produces 84,500 units of product.What journal entry would be needed to record the machines' second year depreciation under the units-of-production method?

• A)Debit Depletion Expense $16,900;credit Accumulated Depletion $16,900.
• B)Debit Depletion Expense $16,000;credit Accumulated Depletion $16,000.
• C)Debit Depreciation Expense $16,900;credit Accumulated Depreciation $16,900.
• D)Debit Depreciation Expense $16,000;credit Accumulated Depreciation $16,000.
• E)Debit Amortization Expense $16,900;credit Accumulated Amortization $16,900.

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Definitions:

Financial Reporting

The endeavor of divulging a firm's financial standing through reports aimed at its administrators, shareholders, and the state.

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The International Accounting Standards Board, which sets and enforces rules for accounting practices worldwide.

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The Financial Accounting Standards Board, an organization responsible for establishing accounting and financial reporting standards for companies and non-profit organizations in the United States.

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The key components of financial statements, including assets, liabilities, equity, revenue, and expenses.