A depreciation schedule for semi-trucks of Blossom Manufacturing Company was requested by your auditor soon after December 31, 2021, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2018 to 2021, inclusive. The following data were ascertained. Balance of Trucks account, Jan. 1, 2018 Truck No. 1 purchased Jan. 1, 2015, cost Truck No.2 purchased July 1, 2015, cost Truck No. 3 purchased Jan 1, 2017, cost Truck No. 4 purchased July 1, 2017, cost Balance, Jan. 1, 2018 $22,140 27,060 36,900 29,520 $115,620 The Accumulated Depreciation-Trucks account previously adjusted to January 1, 2018, and entered in the ledger, had a balance on that date of $37,146 (depreciation on the four trucks from the respective dates of purchase, based on a 5-year life, no salvage value). No charges had been made against the account before January 1, 2018. Transactions between January 1, 2018, and December 31, 2021, which were recorded in the ledger, are as follows. July 1, 2018 Jan 1, 2019 July 1, 2020 Truck No. 3 was traded for a larger one (No.5), the agreed purchase price of which was $49,200. Blossom. paid the automobile dealer $27,060 cash on the transaction. The entry was a debit to Trucks and a credit to Cash, $27,060. The transaction has commercial substance. Truck No. 1 was sold for $4,305 cash; entry debited Cash and credited Trucks, $4,305. A new truck (No. 6) was acquired for $51,660 cash and was charged at that amount to the Trucks account. (Assume truck No. 2 was not retired.) Truck No. 4 was damaged in a wreck to such an extent that it was sold as junk for $861 cash. Blossom received $3,075 from the insurance company. The entry made by the bookkeeper was a debit to Cash, $3,936, and credits to Miscellaneous Income $861, and Trucks, $3,075. July 1, 2020 Entries for straight-line depreciation had been made at the close of each year as follows: 2018, $25,830; 2019, $27,675; 2020, $30,812; 2021, $37,392. 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. (Enter credit, understated and decrease amounts using either a negative sign preceding the number eg. -45 or parentheses eg. (45).) Per Company Books Acc. Dep. Trucks dr. (cr.) Trucks dr. (cr.) Retained Earnings dr. (cr.) Balance A $ $ Purchase Truck #5 Trade Truck #3 Depreciation Balances Sale of Truck #1 Depreciation Balances Purchase of Truck #6 Disposal of Truck #4 Depreciation Balances Depreciation Balance As Adjusted Net Income Overstated (Understated) Trucks dr. (cr.) Acc. Dep., Trucks dr, (cr.) Retained Earnings dr, (cr.) $ TA $ $ $
