On January 1, 2014, Mudhoney Inc. purchased equipment for $45,000. The company is depreciating the equipment at the rate of $750 per month. At January 31, 2015, the balance in Accumulated Depreciation is

Question

Quizplus · Accepted Answer

Accumulated Depreciation is the total amount of depreciation expense that has been recorded for an asset since its acquisition. Since Mudhoney Inc. purchased the equipment for $45,000 and is depreciating it at the rate of $750 per month, the annual depreciation expense would be $9,000 ($750 x 12).

For the period from January 1, 2014 to January 31, 2015, the time elapsed is 13 months (including both January 1, 2014 and January 31, 2015). Therefore, the Accumulated Depreciation at January 31, 2015 would be $9,750 ($9,000 x 13).

Therefore, the best choice is C.