Steve Owns 64% and Mark Owns 36% of a Partnership

question 128

Multiple Choice

Steve owns 64% and Mark owns 36% of a partnership business.They purchase equipment with a suggested value of $9600.The current market value of the equipment at the time of purchase was $9100.At the time of the balance sheet preparation,depreciation of $160 was recorded.Based on the information provided,which of the following is TRUE of the partnership?

• A) The Equipment account will be debited at $9100 on the date of purchase.
• B) The Equipment account will be debited at $8940 on the date of purchase.
• C) The Equipment account will be debited at $9600 on the date of purchase.
• D) The Equipment account will be debited at $9440 on the date of purchase.

---

Definitions:

Manufacturing Overhead

All manufacturing costs aside from the costs of direct materials and direct labor, encompassing expenses such as maintenance, utilities, and rent of the production facility.

Predetermined Overhead Rates

An estimated rate used to allocate manufacturing overhead costs to products or job orders, based on a selected activity base.

Machine-Hours

The total number of hours that machinery is operating for production purposes.

Machining

A manufacturing process involving the shaping of metal or other materials using machines such as lathes, milling machines, and grinders.