On its December 31,2017,balance sheet,Calgary Industries reports equipment of $370,000 and accumulated depreciation of $74,000.During 2018,the company plans to purchase additional equipment costing $80,000 and expects depreciation expense of $30,000.Additionally,it plans to dispose of equipment that originally cost $42,000 and had accumulated depreciation of $5,600.The balances for equipment and accumulated depreciation,respectively,on the December 31,2018 budgeted balance sheet are:
A)$328,000; $74,000.
B)$450,000; $98,400.
C)$450,000; $104,000.
D)$408,000; $104,000.
E)$408,000; $98,400.

Question

Quizplus · Accepted Answer

The equipment balance at the end of 2018 is calculated by starting with the initial balance of $370,000, adding the cost of new equipment purchased ($80,000), and subtracting the cost of equipment disposed of ($42,000), resulting in $408,000. The accumulated depreciation is calculated by starting with the initial balance of $74,000, adding depreciation expense for the year ($30,000), and subtracting the accumulated depreciation on the disposed equipment ($5,600), resulting in $98,400.

On Its December 31,2017,balance Sheet,Calgary Industries Reports Equipment of $370,000