Question

Stevens Company, a manufacturer incurs $267,000 of total depreciation for the twelve months ended 12/31/2019 as indicated below:

	Building Depreciation	$125,000
	Production Equipment	70,000
	Copy Machine:
1	Human Resources	3,000
2	Accounting	3,000
3	Production	3,000
4	Sales Dept.	3,000
	Vehicles:
1	VP Human Resources	15,000
2	VP Accounting	15,000
3	VP Production	15,000
4	VP Sales	15,000 267000

The building is 35,000 square feet with the factory portion occupying 24,500 square footage. Select the entry below to record the 2019 depreciation.

A.

Depreciation Expense	267,000
Accumulated Depreciation		112,500
Manufacturing Overhead		154,500

B.

Depreciation Expense	267,000
Accumulated Depreciation		91,500
Manufacturing Overhead		175,500

C.

Depreciation Expense	267,000
Accumulated Depreciation		267,000

D.

Depreciation Expense	112,500
Manufacturing Overhead	154,500
Accumulated Depreciation		267,000

E.

Depreciation Expense	91,500
Manufacturing Overhead	175,500
Accumulated Depreciation		267,000

Answer 1

Correct Option E
Depreciation Expense	91500
Manufacturing Overhead	175500
Accumulated Deprecation		267000
(To record depreciation)
Working Note :
Total Depreciation	267000
Allocated for Production facilities
Production EQUIPMENT	70000
Production copy machine	3000
VP Production Vehicle depreciation	15000
Factory depreciation	87500	(125000/35000*24500)
Total allocated for manufacturing overhead	175500
Total allocated for depreciation expense	91500