On January 1,Imlay Company Purchases Manufacturing Equipment Costing $95,000 That

question 119

Multiple Choice

On January 1,Imlay Company purchases manufacturing equipment costing $95,000 that is expected to have a five-year life and an estimated salvage value of $5,000.Imlay uses the straight-line depreciation method to allocate costs.The adjusting entry needed on December 31 of the first year is:

• A)Debit Depreciation Expense,$9,000;credit Accumulated Depreciation,$9,000.
• B)Debit Depreciation Expense,$18,000;credit Accumulated Depreciation,$18,000.
• C)Debit Depreciation Expense,$90,000;credit Accumulated Depreciation,$90,000.
• D)Debit Depreciation Expense,$18,000;credit Equipment,$18,000.
• E)Debit Depreciation Expense,$9,000;credit Equipment,$9,000.

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Definitions:

Service Company

A business that provides intangible products, such as services or expertise, rather than physical goods.

Cost Formula

An equation used to calculate the total cost of production, involving fixed and variable components.

Vehicle Operating Cost

refers to the expenses associated with using a vehicle, including fuel, maintenance, insurance, and depreciation.

Cost Formula

An equation used to determine the total cost of production, incorporating variable and fixed costs.