On its December 31,2017,balance sheet,Calgary Industries reports equipment of $370,000 and accumulated depreciation of $74,000.During 2018,the company plans to purchase additional equipment costing $80,000 and expects depreciation expense of $30,000.Additionally,it plans to dispose of equipment that originally cost $42,000 and had accumulated depreciation of $5,600.The balances for equipment and accumulated depreciation,respectively,on the December 31,2018 budgeted balance sheet are:

A) $328,000; $74,000.
B) $450,000; $98,400.
C) $450,000; $104,000.
D) $408,000; $104,000.
E) $408,000; $98,400.

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Bushra Chaudhry · Accepted Answer

Final Answer : E, Explanation :  The equipment balance at the end of 2018 is calculated by starting with the initial balance of $370,000, adding the cost of new equipment purchased ($80,000), and subtracting the cost of equipment disposed of ($42,000), resulting in $408,000. The accumulated depreciation is calculated by starting with the initial balance of $74,000, adding depreciation expense for the year ($30,000), and subtracting the accumulated depreciation on the disposed equipment ($5,600), resulting in $98,400.

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