Basilia Corporation purchased a machine for $180,000 on January 1,2013.Basilia will depreciate the machine using the straight-line method using a five-year period with no residual value.As a result of an error in its purchasing records,Basilia did not recognize any depreciation for the machine in its 2013 financial statements.Basilia discovered the problem during the preparation of its 2014 financial statements.What amount should Basilia record for depreciation expense on this machine for 2014?
A)$0
B)$36,000
C)$44,000
D)$72,000

Question

Quizplus · Accepted Answer

The machine should be depreciated over 5 years with no residual value, so the annual depreciation is $180,000 / 5 = $36,000. Since no depreciation was recorded in 2013, Basilia should record $36,000 for 2014.

Basilia Corporation Purchased a Machine for $180,000 on January 1,2013