Armored Metal Co. reported $975,600 for equipment and $600,000 for accumulated depreciationequipment on its balance sheet. Does

Question:

Armored Metal Co. reported $975,600 for equipment and $600,000 for accumulated depreciation—equipment on its balance sheet.
Does this mean
(a) That the replacement cost of the equipment is $975,600
(b) That $600,000 is set aside in a special fund for the replacement of the equipment? Explain.