Sweet Stuff Co

Multiple Choice

Sweet Stuff Co. purchases equipment with a cost of $36,400 and a trade-in value of $4,000. Sweet Stuff Co. estimates that the equipment will have a useful life of 9 years. Assuming Sweet Stuff Co. records depreciation for one month using the straight-line method, the adjustment would be recorded in the work sheet as a:

A) credit to depreciation expense, $3,600.
B) debit to depreciation expense, $300.
C) credit to equipment, $300.
D) credit to accumulated depreciation, $3,600.