Question

Grove Corp. purchased equipment at a cost of $260,000 in January, 2012. As of January 1, 2016, depreciation of $88,000 had been recorded on this asset. Depreciation expense for 2016 is $22,000. After the adjustments are recorded and posted at December 31, 2016. What are the balances for the Depreciation Expense and Accumulated Depreciation?

A Depreciation Expense: $ 22,000; Accumulated Depreciation: $110,000
B Depreciation Expense: $ 22,000; Accumulated Depreciation: $ 88,000
C Depreciation Expense: $110,000; Accumulated Depreciation: $110,000
D Depreciation Expense: $110,000; Accumulated Depreciation: $ 88,000

Answer 1

A Depreciation Expense: $ 22,000; Accumulated Depreciation: $110,000

Step-by-step explanation:

Given that

Purchase cost of equipment = $260,000

Depreciation at the beginning of year 2016 = $88,000

Depreciation expense = $22,000

So, the balance would be

Depreciation expense = $22,000

And, the accumulated depreciation is

= Depreciation expense + Depreciation at the beginning of year 2016

= $22,000 + $88,000

= $110,000