Foxx Corp.'s comparative balance sheet at December 31, 2015 and 2014 reported accumulated depreciation balances of $830,000 and $600,000, respectively. Property with a cost of $50,000 and a carrying amount of $38,000 was the only property sold in 2015. Depreciation charged to operations in 2015 was
A) $218,000.
B) $230,000.
C) $242,000.
D) $268,000.

Question

Quizplus · Accepted Answer

The depreciation expense for 2015 can be calculated by adding the change in accumulated depreciation to the carrying amount of the sold property, then subtracting the cost of the sold property. The change in accumulated depreciation is $830,000 - $600,000 = $230,000. The carrying amount of the sold property is $38,000. Therefore, the depreciation expense is $230,000 + $38,000 - $50,000 = $218,000. However, since the question asks for the depreciation charged to operations, and the initial calculation was incorrect in the explanation, the correct calculation should consider only the change in accumulated depreciation plus any depreciation related to the sold asset. Since the initial calculation did not correctly adjust for the sale of the asset, the correct depreciation expense considering the error in explanation would still be based on the change in accumulated depreciation and adjustments for the sold asset, leading to a reevaluation of the provided options.

Foxx Corp'S Comparative Balance Sheet at December 31, 2015 and 2014