To determine the correct depreciation expense for 2025, we need to follow a series of steps involving the given financial data.
### Step-by-Step Solution
1. Identify the change in accumulated depreciation:
- Accumulated Depreciation on 12/31/25: \[tex]$1,660,000
- Accumulated Depreciation on 12/31/24: \$[/tex]14,500
The change in accumulated depreciation is calculated as:
[tex]\[
\text{Change in Accumulated Depreciation} = \text{Accumulated Depreciation on 12/31/25} - \text{Accumulated Depreciation on 12/31/24}
\][/tex]
[tex]\[
\text{Change in Accumulated Depreciation} = 1,660,000 - 14,500 = 1,645,500
\][/tex]
2. Determine the accumulated depreciation removed by the sale of equipment:
- Cost of the equipment sold: \[tex]$879,000
- Book value of the equipment sold: \$[/tex]382,000
The accumulated depreciation removed due to the sale of equipment is calculated as:
[tex]\[
\text{Accumulated Depreciation Removed} = \text{Cost of Equipment Sold} - \text{Book Value of Equipment Sold}
\][/tex]
[tex]\[
\text{Accumulated Depreciation Removed} = 879,000 - 382,000 = 497,000
\][/tex]
3. Calculate the depreciation expense for 2025:
Depreciation expense for the year is the total change in accumulated depreciation minus the depreciation associated with the equipment that was sold.
[tex]\[
\text{Depreciation Expense} = \text{Change in Accumulated Depreciation} - \text{Accumulated Depreciation Removed}
\][/tex]
[tex]\[
\text{Depreciation Expense} = 1,645,500 - 497,000 = 1,148,500
\][/tex]
### Conclusion
The depreciation expense for 2025 is [tex]\(\$1,148,500\)[/tex].
Given this step-by-step calculation, the correct option for the depreciation expense in 2025 is not explicitly listed among the options provided (\[tex]$147,000, \$[/tex]707,000, \[tex]$765,000, \$[/tex]87,000). It appears there might be a discrepancy in the provided multiple-choice options, as none of them match the calculated depreciation expense of \$1,148,500.
