On January 1, Year 1, Jing Company purchased office equipment that cost $16,200 cash. The equipment...
On January 1, Year 1, Jing 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 $6,040 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?
Homework Answers
Cost of equipment = 16200+2300 = 18500
Dep rate = 100/5*2 = 40%
Year 1 Dep = 18500*40% = 7400
Year 2 Dep = 18500*60%*40% = 4440
Year 3 Dep = (18500-7400-4440-6040) = 620
Year 3 Depreciation expense = $620
Accumulated dep = 7400+4440+620 = $12460
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