E10.14 (LO 1, 2) (Error Analysis and Depreciation, SL and SYD) Kawasaki Ltd. shows the following entries in its Equipment account for 2026. All amounts (in yen, in thousands) are based on historical cost.

Equipment Jan. 1 Balance 133,000 June 30 Cost of equipment sold

(purchased prior to 2026)

Aug. 10 Purchases 32,000 12 Freight on equipment purchased 700 23,000 25 Installation costs 2,500 Nov. 10 Repairs 500 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 2026 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, 2026, balance was purchased in 2024.

1. Straight-line.

2. Sum-of-

the-

years’-

digits.