Zahn Corp.'s comprehensive Balance Sheet at December 31, 2005 and 2004 reported accumulated depreciation balances of $800,000 and $600,000, respectively. Property with a cost of $50,000 and a carrying amount of $40,000 was the only property sold in 2005.

Depreciation charged to operations in 2005 was:
A. $190,000
B. $200,000
C. $210,000
D. $220,000

Respuesta :

Answer: C. $210,000

Explanation: Looking at the accumulated depreciation balances in 2004 and 2005 respectively

= $600,000 and $800,000

= $200,000 (is the increased depreciation value)

Therefore the accumulated depreciation on the property sold is (Property Cost - Property Sold)

= $50,000 - $40,000

= $10,000

Depreciation charged to operations in 2005 is

= increment in depreciation value balances + accumulated depreciation on property

= $200,000 + $10,000

= $210,000

I hope this helps!

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