Legacy Ironworks Co. reported $3,175,000 for equipment and $2,683,000 for accumulated depreciationequipment on its balance sheet. Does

Question:

Legacy Ironworks Co. reported $3,175,000 for equipment and $2,683,000 for accumulated depreciation—equipment on its balance sheet. Does this mean
(a) That the replacement cost of the equipment is $3,175,000 and
(b) That $2,683,000 is set aside in a special fund for the replacement of the equipment? Explain.