The following information applies to the questions displayed below Jing Company
ID: 2392006 • Letter: T
Question
The following information applies to the questions displayed below Jing Company was started on January 1, 2016 when it issued common stock for $39,000 cesh. Also, on January 1, 2016 the company purcifased office equipment that cost $16,300 cash. The equipment was delivered under terms FOB shipping point and transportation cost was $2.400. The equipment had a five year useful life and a $6,100 expected salvage value. value 17.00 points Assume that Jing Company eamed $26.200 cash revenue and incurred $16.500 im cash expenses in 2018 using straight -line deprecation and assuming that the office equipment was sold on December 31. 2018 for $10,000, the amount of net income or (loss) appearing on the December 31, 2018 income statement would be: O ($2.460) o $6,040, O $3,060 O $5,940 O Type here to searchExplanation / Answer
Equipment depreciation = (16300 + 2400 - 6100) / 5 = 2520
Book value as on December 31 2018 = 2520 * 3 = 7560
Loss on sale of equipment = 16300 + 2400 - 7560 - 10000 = 1140
Net income = 26200 - 16500 - 2520 - 1140 = 6040
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