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4. Holman Company owns equipment with an original cost of $95,000 and an estimated salvage value of $5,000 that is being depreciated at $15,000 per
4. Holman Company owns equipment with an original cost of $95,000 and an estimated salvage value of $5,000 that is being depreciated at $15,000 per year using the straight-line depreciation method, and only prepares adjustments at year-end. The adjusting entry needed to record annual depreciation is: A) Debit Depreciation Expense, $15,000; credit Equipment, $15,000. B) Debit Equipment, $15,000; credit Accumulated Depreciation, $15,000. C) Debit Depreciation Expense, $10,000; credit Accumulated Depreciation, $10,000. D) Debit Depreciation Expense, $10,000; credit Equipment, $10,000. E) Debit Depreciation Expense, $15,000; credit Accumulated Depreciation, $15,000. 5. On December 31, Carmack Company received a $215 utility bill for December that it will not pay until January 15. The adjusting entry needed on December 31 to accrue this expense is: A) Debit Utilities Expense $215; credit Accounts Payable $215. B) Debit Accounts Payable $215; credit Utilities Expense $215. C) Debit Prepaid Utilities $215; credit Cash $215. D) Debit Utilities Expense $215; credit Prepaid Utilities $215. E) Debit Prepaid Utilities $215; credit Accounts Payable $215. 6. On December 31, Winters Company received a $385 bill for the purchase of supplies in December that it will not pay for until January 15. Winters follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry needed on December 31 to accrue this cost is: A) Debit Supplies $385; credit Accounts Payable $385. B) Debit Accounts Payable $385; credit Supplies $385. C) Debit Accounts Payable $385; credit Cash $385. D) Debit Supplies Expense $385; credit Cash $385. E) Debit Supplies Expense $385; credit Supplies $385
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