Ryan Company purchased a machine on July 1,2013.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 31,2014,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 machine was purchased on July 1, 2013, so it has been in service for 18 months as of December 31, 2014. The annual depreciation expense is ($250,000 - $10,000) / 8 = $30,000. The depreciation expense for the 18 months ended December 31, 2014, is $30,000 x 18 / 12 = $45,000.

Ryan Company Purchased a Machine on July 1,2013