Claxton Corp.purchased equipment at a cost of $320,000 in January,2010.As of January 1,2014,depreciation of $160,000 had been recorded on this asset.Depreciation expense for 2014 is $40,000.After the adjustments are recorded and posted at December 31,2014,what are the balances for the Equipment and Accumulated Depreciation? Equipment Accumulated Depreciation

Question

Quizplus · Accepted Answer

The cost of the equipment (original purchase price) is $320,000. 
The accumulated depreciation as of January 1, 2014 is $160,000. 
Depreciation expense for 2014 is $40,000. 
Therefore, accumulated depreciation at December 31, 2014 is $200,000 (160,000 + 40,000). 
The balance for Equipment at December 31, 2014 is still the original cost of $320,000. 
So, the correct choice is A, which shows equipment balance of $320,000 and accumulated depreciation balance of $200,000.