Use the information below for Oakland Inc.for 2013 and 2014 to answer the following question. During 2014,Oakland Inc.sold equipment with a cost of $30,000 and accumulated depreciation of $25,000.A gain of $3,000 was recognized on the sale of the equipment This was the only equipment sale during the year.
What was depreciation expense for 2014?

Question

Use the information below for Oakland Inc.for 2013 and 2014 to answer the following question.  During 2014,Oakland Inc.sold equipment with a cost of $30,000 and accumulated depreciation of $25,000.A gain of $3,000 was recognized on the sale of the equipment This was the only equipment sale during the year.
What was depreciation expense for 2014?

Quizplus · Accepted Answer

Depreciation expense for 2014 can be calculated by subtracting the accumulated depreciation for 2014 from the accumulated depreciation for 2013. 
Accumulated depreciation for 2013 = $50,000 
Accumulated depreciation for 2014 = $25,000 + ($30,000 - $25,000 - $3,000) = $27,000 
Depreciation expense for 2014 = Accumulated depreciation for 2014 - Accumulated depreciation for 2013 = $27,000 - $50,000 = -$23,000 
Since depreciation expense cannot be negative, we need to adjust for the gain on the sale of the equipment. 
Depreciation expense for 2014 = -$23,000 + $3,000 = -$20,000 
Therefore, the closest answer is B) $16,000.

Use the Information Below for Oakland Inc