A depreciation schedule for semitrucks owned by Ichiro Manufacturing was requested by your auditor soon after December 31, 2023, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2020 to 2023, inclusive. The following data were ascertained (amounts in thousands).

Balance of Trucks account, Jan. 1, 2020
Truck No. 1 purchased Jan. 1, 2017, cost ............................ ¥18,000
Truck No. 2 purchased July 1, 2017, cost ............................ 22,000
Truck No. 3 purchased Jan. 1, 2019, cost ............................ 30,000
Truck No. 4 purchased July 1, 2019, cost ............................ 24,000
Balance, Jan. 1, 2020 ........................................................... . ¥94,000

The Accumulated Depreciation—Trucks account previously adjusted to January 1, 2020, and entered in the ledger, had a balance on that date of ¥30,200 (depreciation on the four trucks from the respective dates of purchase, based on a 5-year life, no residual value). No charges had been made against the account before January 1, 2020. Transactions between January 1, 2020, and December 31, 2023, which were recorded in the ledger, are as follows.

July 1, 2020	Truck No. 3 was traded for a larger one (No. 5), the agreed purchase price of which was ¥40,000. Ichiro paid the automobile dealer ¥22,000 cash on the transaction. The entry was a debit to Trucks and a credit to Cash, ¥22,000. The transaction has commercial substance.
Jan. 1, 2021	Truck No. 1 was sold for ¥3,500 cash; entry debited Cash and credited Trucks, ¥3,500.
July 1, 2022	A new truck (No. 6) was acquired for ¥42,000 cash and was charged at that amount to the Trucks account. (Assume Truck No. 2 was not retired.)
July 1, 2022	Truck No. 4 was damaged in a wreck to such an extent that it was sold as junk for ¥700 cash. Ichiro received ¥2,500 from the insurance company. The entry made by the bookkeeper was a debit to Cash, ¥3,200, and credits to Miscellaneous Income ¥700 and Trucks ¥2,500.

Entries for depreciation (using the straight-line method) had been made at the close of each year as follows: 2020, ¥21,000; 2021, ¥22,500; 2022, ¥25,050; and 2023, ¥30,400. 

Instructions

a. For each of the 4 years, compute separately the increase or decrease in net income arising from the company’s errors in determining or entering depreciation or in recording transactions affecting trucks, ignoring income tax considerations.

b. Prepare one compound journal entry as of December 31, 2023, for adjustment of the Trucks account to reflect the correct balances as revealed by your schedule, assuming that the books have not been closed for 2023.