On January 4, 2012, Peggy's Cafe Acquired Equipment for $180,000

On January 4, 2012, Peggy's Cafe acquired equipment for $180,000. The estimated life of the equipment is 4 years or 42,500 hours. The estimated residual value is $10,000. What is the balance in the accumulated depreciation account at December 31, 2013 if the straight-line method is used?

A) $42,500
B) $45,000
C) $85,000
D) $90,000