X Company prepares annual financial statements. On January 1, 2012, it purchased

Question

X Company prepares annual financial statements. On January 1, 2012, it purchased a machine for $76,000. Its estimated useful life was 4 years and its estimated disposal value in 4 years was $10,000. Using, straight-line depreciation, what is the adjusting entry on December 31, 2015? Equipment and Paid-In Capital both decrease by $19,000 Equipment and Retained Earnings both decrease by $49,500 Equipment and Paid-In Capital both decrease by $16,500 Equipment and Retained Earnings both increase by $49,500 Equipment and Retained Earnings both decrease by $16,500 Equipment and Retained Earnings both decrease by $19,000

Explanation / Answer

life 4 cost 76000 salvage 10000 depreciation(76000-10000)/4 16500 so due to depreciation, both equipment and retained earnings decreases option d

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