Quinn Spellman formed Spellman Tutoring, Inc (STI) and it has since become a popular provider of academic tutoring withi

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Quinn Spellman formed Spellman Tutoring, Inc (STI) and it hassince become a popular provider of academic tutoringwithin the local community. You are working with the company toprepare the 20X1 financial statements and Quinnprovides you with the below 12/31/20X1 account balances, all ofwhich are normal. As indicted by the question mark, certainbalances have been intentionally omitted.A/C # Account Description Balance A/C # AccountDescription Balance100 Cash $? 300 Common stock $30,000105 Accounts receivable 12,000 305 Retained earnings 20,000110 Prepaid insurance expense 9,000 310 Dividends20,000115 Teaching supplies 38,000 400 Tutoring Revenue 215,000120 Copy Machine 16,000 500 Advertising Expense 40,000125 Accumulated depreciation 13,320 505 Depreciationexpense 0130 Land 25,000 510Equipment Rental Expense 9,000200 Accounts Payable- SSC 7,000 515Insurance Expense 7,000205 Interest Payable 0 520 Interestexpense 0210 Tutoring Advance Pay 0 525 Miscellaneous Expense ?215 Wages Payable 0 530 Supplies Expense0220 Utilities Payable 0 535 Utilities expense11,000225 Notes payable 40,000 540 Wages expense 105,000Consider that the company owns only a single asset, the copymachine, and STI rents all other equipment. The copy machineisdepreciated using the units of production depreciation method. Atthe time of purchase, STI estimated a residual value equal to 10%ofthe asset’s purchase price and estimated (per the manufacturer’sguidelines) that 160,000 copies would be made during the asset’slife.Assume that 14,000 copies were made in 20X1. Select the answerbelow that shows the 12/31/20X1 AJE for depreciation:
A. A/C # Account Description Debit Credit505 Depreciation Expense 1,260
125 AccumulatedDepreciation 1,260
B. A/C # Account Description Debit Credit505 Depreciation Expense 1,200
125 AccumulatedDepreciation 1,200C. A/C # Account Description Debit Credit505 Depreciation Expense 1,080
125 Accumulated Depreciation1,080
D. A/C # Account Description Debit Credit505 Depreciation Expense 1,400
125 Accumulated Depreciation1,400E. None of the answers provided are correct.