On January 1, Year 1, Jing Company purchased office equipment that cost $16,000 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $2,100. The equipment had a five-year useful life and a $5,800 expected salvage value. Assuming the company uses the double-declining-balance depreciation method, what are the amounts of depreciation expense and accumulated depreciation, respectively, that would be reported in the financial statements prepared as of December 31, Year 3? Multiple Choice $716 and $12,300 $0 and $16.600 $3.542 and $20142 $5,904 and $15.744
On January 1, Year 1, Jing Company purchased office equipment that cost $16,000 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $2,100. The equipment had a five-year useful life and a $5,800 expected salvage value. Assuming the company uses the double-declining-balance depreciation method, what are the amounts of depreciation expense and accumulated depreciation, respectively, that would be reported in the financial statements prepared as of December 31, Year 3? Multiple Choice $716 and $12,300 $0 and $16.600 $3.542 and $20142 $5,904 and $15.744
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 7E: Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:On January 1, Year 1, Jing Company purchased office equipment that cost $16,000 cash. The equipment was delivered
under terms FOB shipping point, and transportation cost was $2,100. The equipment had a five-year useful life and a
$5,800 expected salvage value.
Assuming the company uses the double-declining-balance depreciation method, what are the amounts of depreciation expense and accumulated
depreciation, respectively, that would be reported in the financial statements prepared as of December 31, Year 3?
Multiple Choice
$716 and $12,300
$0 and $16,600
$3.542 and $20,142
$5,904 and $15.744
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