A manufacturing company purchased equipment on January 1, 2010 for $450,000. As

Question

A manufacturing company purchased equipment on January 1, 2010 for $450,000. As of January 1, 2019, depreciation of $202,500 had been recorded on this asset. Depreciation expense for 2019 is $22,500. After the adjustments are recorded and posted at December 31, 2019, what are the balances for the Equipment and Accumulated Depreciation?

     Equipment      Accumulated Depreciation

a.

$450,000                  $225,000

b.

$450,000                  $0

c.

$225,000                  $22,500

d.

$225,000                  $225,000

a.

$450,000                  $225,000

b.

$450,000                  $0

c.

$225,000                  $22,500

d.

$225,000                  $225,000

Explanation / Answer

Book value as on beginning of 2019=Original cost-Accumulated depreciation

=(450,000-202500)=$247500

Hence balance for equipment after the adjustments are recorded =(247500-22500)=$225000

Hence  Accumulated Depreciation=(202500+22500)=$225000

Hence the correct option is D.

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