Three Years Ago a Machine Was Purchased for $5,000

Multiple Choice

Three years ago a machine was purchased for $5,000. Assuming a ten-year life and straight line depreciation with a no salvage value, which of the following will appear on the income statement and balance sheet respectively after four years?

A) Depreciation expense of $2,000, accumulated depreciation of $2,000.
B) Depreciation expense of $500, accumulated depreciation of $2,000.
C) Accumulated depreciation of $2,000, depreciation expense of $500.
D) Accumulated depreciation of $500, depreciation expense of $2,000.
E) Depreciation expense of $1,500, accumulated depreciation of $500.