Jing Company Was Started on January 1, Year 1 When

question 109

Multiple Choice

Jing Company was started on January 1, Year 1 when it issued common stock for $50,000 cash. Also, on January 1, Year 1 the company purchased office equipment that cost $34,000 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $2,000. The equipment had a five-year useful life and a $12,000 expected salvage value.At the end of Year 5, assuming the equipment had not been sold, the book value of the office equipment using straight-line depreciation and double-declining-balance depreciation, respectively, would be:

• A) $12,000 and $1,680.
• B) $12,000 and $12,000.
• C) $0 and $0.
• D) None of these answer choices are correct.

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