Jing Company was started on January 1, 2016 when it issued common stock for $38,000 cash. Also, on January 1, 2016 the company purchased office equipment that cost $16,200 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $2,300. The equipment had a five-year useful life and a $6,000 expected salvage value.

3.

Required information

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/$16,800.

$6,192/$16,512.

$660/$12,500.

$3,715/$20,515.

4.

Required information

Assume that Jing Company earned $25,400 cash revenue and incurred $16,000 in cash expenses in 2018. Using straight-line depreciation and assuming that the office equipment was sold on December 31, 2018 for $9,900, the amount of net income or (loss) appearing on the December 31, 2018 income statement would be:

($2,220).

$5,800.

$3,420.

$5,580.