Foxx Corp.'s comparative balance sheet at December 31, 2018 and 2017 reported accumulated depreciation balances of $1,245,000 and $900,000, respectively. Property with a cost of $75,000 and a carrying amount of $57,000 was the only property sold in 2018. Depreciation charged to operations in 2018 was:

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Business

Mila Buck

3 October, 00:47

Foxx Corp.'s comparative balance sheet at December 31, 2018 and 2017 reported accumulated depreciation balances of $1,245,000 and $900,000, respectively. Property with a cost of $75,000 and a carrying amount of $57,000 was the only property sold in 2018. Depreciation charged to operations in 2018 was:

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Justus · Answer 1

The multiple choices are as follows:

a. $327,000.

b. $345,000.

c. $363,000.

d. $402,000.

The correct option is B,$345,000

Explanation:

The depreciation charged to operations in the year 2018 is the increase in accumulated depreciation in 2018 compared to 2017 accumulated depreciation i. e the actual depreciation charge incurred in the year 2018 is addition to accumulated depreciation in 2018, which is computed thus:

2018 accumulated depreciation $1,245,000

2017 accumulated depreciation ($900,000)

increase in 2018 $345,000

Hence the depreciation in 2018 is $345,000, which is charged in the income statement for 2018 in order to arrive at net income