Ryan Company purchased a machine on July 1, 2011. The machine cost $250,000 and has a salvage value of $10,000 and a useful life of eight years. The adjusting entry for the year ending December 31, 2012, would include a debit to Depreciation Expense of
A) $30,000.
B) $15,000.
C) $31,250.
D) $15,625.

Question

Quizplus · Accepted Answer

The depreciation expense for the year ending December 31, 2012, is calculated as follows:Depreciation expense = (Cost of machine - Salvage value) / Useful life= ($250,000 - $10,000) / 8= $240,000 / 8= $30,000Therefore, the adjusting entry for the year ending December 31, 2012, would include a debit to Depreciation Expense of $30,000.

Ryan Company Purchased a Machine on July 1, 2011