The following information applies to the questions displayed

The following information applies to the questions displayed below Jing Company was started on January 1, 2016 when it issued common stock for $39,000 cesh. Also, on January 1, 2016 the company purcifased office equipment that cost $16,300 cash. The equipment was delivered under terms FOB shipping point and transportation cost was $2.400. The equipment had a five year useful life and a $6,100 expected salvage value. value 17.00 points Assume that Jing Company eamed $26.200 cash revenue and incurred $16.500 im cash expenses in 2018 using straight -line deprecation and assuming that the office equipment was sold on December 31. 2018 for $10,000, the amount of net income or (loss) appearing on the December 31, 2018 income statement would be: O ($2.460) o $6,040, O $3,060 O $5,940 O Type here to search

Solution

Equipment depreciation = (16300 + 2400 - 6100) / 5 = 2520

Book value as on December 31 2018 = 2520 * 3 = 7560

Loss on sale of equipment = 16300 + 2400 - 7560 - 10000 = 1140

Net income = 26200 - 16500 - 2520 - 1140 = 6040