Jing Company Was Started on January 1, Year 1 When

question 37

Multiple Choice

Jing Company was started on January 1, Year 1 when it issued common stock for $39,000 cash. Also, on January 1, Year 1 the company purchased 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.Assume that Jing Company earned $26,200 cash revenue and incurred $16,500 in cash expenses in Year 3. Using straight-line depreciation and assuming that the office equipment was sold on December 31, Year 3 for $10,000, the amount of net income or (loss) appearing on the December 31, Year 3 income statement would be:

• A) ($2,460).
• B) $3,060.
• C) $6,040.
• D) $5,940.

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Definitions:

Fermentation

Anaerobic glucose-breakdown pathway that produces ATP without the use of electron transfer chains.

Pyruvate

A critical molecule in cellular metabolism that marks the end of glycolysis and the starting point for the Krebs cycle in aerobic respiration or fermentation in anaerobic conditions.

NAD+

Nicotinamide adenine dinucleotide, a coenzyme found in all living cells that is critical in metabolic processes, particularly in redox reactions.

NADH

Nicotinamide adenine dinucleotide (NADH) serves as an electron carrier, playing a crucial role in cellular energy production during the process of oxidative phosphorylation.