Jing Company was started on January 1, 2016 when it issued common stock for $41,000 cash. Also, on January 1, 2016 the company purchased office equipment that cost $18,100 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $2,600. The equipment had a five-year useful life and a $6,600 expected salvage value.
3. Using double-declining balance depreciation, determine the amount of depreciation expense and the amount of accumulated depreciation that would appear on the December 31, 2018 financial statements.
$0 / $18,100.
$6,624 / $17,664.
$852 / $14,100.
$3,974 / $22,074.
4. Assume that Jing Company earned $27,800 cash revenue and incurred $17,500 in cash expenses in 2018. Using straight-line depreciation and assuming that the office equipment was sold on December 31, 2018 for $10,200, the amount of net income or (loss) appearing on the December 31, 2018 income statement would be:
($2,740).
$5,440.
$3,140.
$6,360.