Question

On January 1, Year 1, Jing Company purchased office equipment that cost $18,300 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $2,800. The equipment had a five-year useful life and a $6,800 expected salvage value.

Answer 1

equipment value 21,100

depreciation per year under striaght-line method: $2,860

Step-by-step explanation:

All incurred cost needed to leave the equipment ready for use must be capitalized:

We should incluide

cost 18,300 + 2,800 freight-in cost = 21,100

`(Adquisition \: Value- \: Salvage \: Value)/(useful \: life)= Depreciation \: coplete \: year`

`(21,100 - 6,800)/(5)= Depreciation \: coplete \: year`

depreication per year: 2,860