Butte Ironworks Co. reported $7,500,000 for equipment and $6,175,000 for accumulated depreciationequipment on its balance sheet. Does

Question:

Butte Ironworks Co. reported $7,500,000 for equipment and $6,175,000 for accumulated depreciation—equipment on its balance sheet.
Does this mean
(a) That the replacement cost of the equipment is $7,500,000 and
(b) That $6,175,000 is set aside in a special fund for the replacement of the equipment? Explain.