Jing Company was started on January 1, Year 1 when it issued common stock for $2

Question

Jing Company was started on January 1, Year 1 when it issued common stock for $27,000 cash. Also, on January 1, Year 1 the company purchased office equipment that cost $15,100 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $1,200. The equipment had a five-year useful life and a $5,600 expected salvage value.

Using double-declining-balance depreciation, what the amount of depreciation expense and the amount of accumulated depreciation, respectively, that would appear on the December 31, Year 3 financial statements?

$2,765 and $15,465.

$268 and $10,700.

$0 and $12,700.

$4,608 and $12,288.

Explanation / Answer

Answer is $ 268 and $ 10700 Explanation: Cost of Equipment (15100+1200) 16300 Rate of SLM: (100/5):20% Rate OF DDB: 40% Year BV in Beg Dep expense Acc. Dep BV at the end 1 16300 6520 6520 9780 2 9780 3912 10432 5868 3 5868 268 10700 5600 4 5600 0 10700 5600 5 5600 0 10700 5600

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