On January 1,2012 Eller Company Purchased an Asset That Had

Multiple Choice

On January 1,2012 Eller Company purchased an asset that had cost $24,000.The asset had an 8-year useful life and an estimated salvage value of $1,000.Eller depreciates its assets on the straight-line basis.On January 1,2016 the company spent $6,000 to improve the quality of the asset.Based on this information,the recognition of depreciation expense in 2016 would

A) increase total assets by $4,375.
B) reduce total equity by $4,375.
C) reduce total assets by $4,625.
D) increase total equity by $4,625.