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On January 1, Year 1, Jing Company purchased office equipment that cost $18,000 cash
On January 1, Year 1, Jing Company purchased office equipment that cost $18,000 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $2,500. The equipment had a five-year useful life and a $6,500 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?
$6,480 and $17,280
$3,888 and $21,388
$880 and $6,500
$0 and $17,500
None of the above
Expert Solution
So, the correct option is 5th "None of the above". Depreciation expenses for year 3 is $880 and Accumulated depreciation expense for year 3 is $14,000.
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