A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2015, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2012 to 2015, inclusive. The following data were ascertained.

Balance of Trucks account, Jan. 1, 2012

Truck No. 2 purchased July 1, 2009, cost 39780
truck No. 3 purchased Jan. 1, 2011, cost 48620

Truck No. 4 purchased July 1, 2011, cost 66300

Truck No. 4 purchased July 1, 2011, cost 53040

Balance, Jan. 1, 2010 207740

The Accumulated Depreciation-Trucks account previously adjusted to January 1, 2012, and entered in the ledger, had a balance on that date of $66,742 (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, 2012.

Transactions between January 1, 2012, and December 31, 2015, which were recorded in the ledger, are as follows.

July 1, 2012		Truck No. 3 was traded for a larger one (No. 5), the agreed purchase price of which was $88,400. Ichiro Mfg. Co. paid the automobile dealer $48,620 cash on the transaction. The entry was a debit to Trucks and a credit to Cash, $48,620. The transaction has commercial substance.
Jan. 1, 2013		Truck No. 1 was sold for $7,735 cash; entry debited Cash and credited Trucks, $7,735.
July 1, 2014		A new truck (No. 6) was acquired for $92,820 cash and was charged at that amount to the Trucks account. (Assume truck No. 2 was not retired.)
July 1, 2015		Truck No. 4 was damaged in a wreck to such an extent that it was sold as junk for $1,547 cash. Ichiro Mfg. Co. received $5,525 from the insurance company. The entry made by the bookkeeper was a debit to Cash, $7,072, and credits to Miscellaneous Income, $1,547, and Trucks, $5,525.

Entries for depreciation had been made at the close of each year as follows: 2012, $46,410; 2013, $49,725; 2014, $55,361; 2015, $67,184.

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

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

PER ACCOUNTING BOOKS Trucks dr. (cr.) Acc. Dep. Trucks dr. (cr.) Retained Earnings dr. (cr.)

AS ADJUSTED Trucks dr. (cr.) Acc. Dep. Trucks dr. (cr.) Retained Earnings dr. (cr.)

NET income overstated (understated)

1/1/12

Balance

7/1/12

Purchase Truck #5

Trade Truck #3

12/31/12

Depreciation

12/31/12

Balances

1/1/13

Sale of Truck #1

12/31/13

Depreciation

12/31/13

Balances

7/1/14

Purchase of Truck #6

7/1/14

Disposal of Truck #4

12/31/14

Depreciation

12/31/14

Balances

12/31/15

Depreciation

12/31/15

Balance