Kawasaki Ltd. shows the following entries in its Equipment account for 2020. All amounts (in yen, in thousands) are based on historical cost.

Instructions
a. Prepare any correcting entries necessary.
b. Assuming that depreciation is to be charged for a full year on the ending balance in the asset account, compute the proper depreciation charge for 2020 under each of the methods listed below. Assume an estimated life of 10 years, with no residual value. The machinery included in the January 1, 2020, balance was purchased in 2018.
1. Straight-line.
2. Sum-of-the-years'-digits.

Transcribed Image Text:

Equipment Jan. 1 Balance Cost of equipment sold (purchased prior to 2020) 133,000 June 23,000 30 Aug. Purchases 10 32,000 12 Freight on equipment 700 purchased 25 Installation costs 2,500 Nov. Repairs 10 500