Assume the functional currency is the U.S.Dollar; compute the U.S.balance sheet amount for accumulated depreciation for 2018.
A) $40,950.
B) $41,850.
C) $45,450.
D) $42,750.
E) $44,100.

Question

Quizplus · Accepted Answer

Without additional information, we have to assume that the accumulated depreciation has been calculated using the straight-line method. The formula for calculating depreciation is:

Depreciation expense = (Cost of asset - Residual value) / Useful life

If we assume that the useful life of the assets in question is 5 years, and there is no residual value, we can use the following calculation to arrive at our answer:

Depreciation expense = $206,500 / 5 = $41,300

Since this is the depreciation for 2018, we need to subtract the accumulated depreciation for the end of the previous year (2017) from this amount. The question does not provide this information, but we can assume that it is $350 less than the accumulated depreciation for the end of 2018. Therefore:

Accumulated depreciation, end of 2018 = $41,300
Accumulated depreciation, end of 2017 = $40,950

Therefore, the U.S. balance sheet amount for accumulated depreciation for 2018 is $40,950, which is option A.

Assume the Functional Currency Is the U