The Pitter Corporation purchased a notebook computer for $3,000 on December 1. The useful life of the notebook computer is estimated to be 5 years. If ﬁnancial statements are to be prepared on December 31, the company should make the following adjusting entry:
A) debit depreciation expense, $600; credit accumulated depreciation, $600.
B) debit depreciation expense, $50; credit accumulated depreciation, $50.
C) debit depreciation expense, $2,400; credit accumulated depreciation, $2,400.
D) debit oﬃce equipment, $50; credit accumulated depreciation, $50.

Question

Quizplus · Accepted Answer

The annual depreciation is $3,000 / 5 years = $600 per year. Since the computer was purchased on December 1 and financial statements are prepared on December 31, only one month of depreciation needs to be accounted for. Therefore, the monthly depreciation is $600 / 12 months = $50. The correct adjusting entry is to debit depreciation expense and credit accumulated depreciation for $50.

The Pitter Corporation Purchased a Notebook Computer for $3,000 on December