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Jing Company was started on January 1, Year 1 when it issued common stock for $28,000 cash. Also, on January 1, Year 1 the company purchased office equipment that cost $15,200 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $1300. The equipment had a five-year useful life and a $5700 expected salvage value. Assume that Jing Company earned $17,400 cash revenue and incurred $11,000 in cash expenses in Year 3. Using straight-line depreciation and assuming that the office equipment was sold on December 31, Year 3 for $8900, the amount of net income or (loss) appearing on the December 31, Year 3 income statement would be:

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Answer:

5,280 net income for the Year 3

Explanation:

This would be the situation:

17,400 revenue

11,000 expenses

gain/loss on sale of equipment

= net income year 3

To know the result of the sale of equipment we have to do

sales price - book value = gain/loss on sale of equipment

8900         -  book value   = gain/loss

We have to determinate the book value.

book value = adquisition cost - acumulated depreciation

The equipment cost 15,200 + 1,300 transportation cost = 16,500 Adquisition Cost

acumulated depreciation = depreciation per year * 3 years

and depreciation per year is:

[tex]\ $ depreciation per year $= \frac{Adquisition Value - Salvage Value }{Useful Life}[/tex]

Here we have all the values, so we stop digging and start solving.

  • depreciation = (16,500-5,700)/5 = 2,160
  • acumulated depreciation = 2,160 * 3 = 6,480
  • book value = 16,500 - 6,480 = 10,020
  • gain/loss = 8,900 - 10,020 = -1,120 LOSS on sale of Equipment

net income = 17,400 - 11,000 - 1,120 = 5,280 net income for the Year 3

Net Income sales minus cost of goods sold, general costs, taxes, and interest. The net income for Year 3  will be $5,280.

What do you mean by net income?

In business and accounting, Net income is the income of an entity other than the cost of goods sold, costs, depreciation and deductions, interest, and taxes for the calculation period.

As per the information,

17,400 revenue

11,000 expenses

sales price - book value = gain/loss on sale of equipment

[tex]\rm\,8900 - book \;value = gain/loss\\\\book \;value = acquisition \; cost - accumulated \;depreciation\\\\(The \;equipment \; cost) \;15,200 + 1,300 \;(transportation \;cost) = 16,500 Acquisition \;Cost\\\\Accumulated \; depreciation = depreciation \;per \;year \times 3 \; \rm\,years\\\\[/tex]

Depreciation per year is:

[tex]\rm\,Depreciation = \dfrac{(16,500-5,700)}{5} = 2,160\\\\\rm\,Accumulated \;depreciation = 2,160 \times 3 = 6,480\\\\Book\; value = 16,500 - 6,480 = 10,020\\\\Gain/loss = 8,900 - 10,020 = -1,120 (Loss\; on\; sale \;of\; Equipment)[/tex]

Net income = 17,400 - 11,000 - 1,120 = 5,280

Thus, the net income for the year 3 is $5,280

To learn more about net income, refer:

https://brainly.com/question/25906113

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