ACCT 3110 Fall 2017/Chapter 11 Homework Problem 11-4 A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2018, showing the sins retets, drpreciatn, ad other data affecting the income of the comouny in the -yeer period 2015 to 2018, induse. The toloning asta Balance of Trucks account, Jan. 1, 2015 Truck No. 1 purchased Jan 1, 2012, cost $18,000 Truck No. 2 purchased July 1, 2012, cost 22,000 Truck No. 3 purchased Jan. 1, 2014, cost30,000 Truck No. 4 purchased July 1, 2014, cost 24,000 Balance, Jan. 1, 2015 $94,000 The Accumulated Depreciation-Trucks account previously adjusted to January 1, 2015, and entered in the ledger, had a balance on that date of $30, 300 (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, 2015. Transactions between January 1, 2015, and December 31, 2018, which were recorded in the ledger, are as follows uly 1, 2015 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 credt to Cash, $22,000. The transaction has cerl substance. an. 1, 2016 Truck No. 1 was sold for $3,500 cash; entry debited Cash and credited Trucks, $3,500 uly 1, 2017 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.) uly 1, 2017 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 nes a debit to Cash, S3,200ard credits to Miscellaneous income, sroo. and Trucks, S2.500 Entries for straight-line depreciation had been made at the close of each year as foliows: 2015, $21,000; 2016,$22,500; 2017, $25,050; 2018, $30,400 For each of the 4 years, compute separately the increase or decrease in net income arising from the company's errors determining or enteng 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 e.g. -45 or parentheses e.g. (45).) Per Company Books As Adjusted Trucks dr. (or.) Ace. Dep. Trucks dr. arnings dr. Trucks dr AcE. Dep. (er.) Trucks dr, Earnings de, Overstated (Understated) 1/1/15 Balance 7/1/5 Purchase Truck 5 Trade Truck3 12/31/15 Depreciation 2/31/15 Balances 1/1/16 Sale of Truck 12/31/16 Depreciation 12/31/16 Balances 7/1/17Purchase of Truck ae 7/1/17 Disposal of Truck .4 2/31/17 Depreciation 12/31/17 Balances 2/31/18 Depreciation 2/31/18 Balance Prepare one compound journal entry as of December 31, 2018, for adustment of the T schedule, assuming that the books have not been closed for 2018. (If mo entry is reguired, select "No Entry" for the the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Trucks account to reflect the correct balances as revealed by your account titles and enter 0 for Account Titles and Explanation Debit Credit Question Attempts: Unlimited ACCT 3110 Fall 2017/Chapter 11 Homework Problem 11-4 A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2018, showing the sins retets, drpreciatn, ad other data affecting the income of the comouny in the -yeer period 2015 to 2018, induse. The toloning asta Balance of Trucks account, Jan. 1, 2015 Truck No. 1 purchased Jan 1, 2012, cost $18,000 Truck No. 2 purchased July 1, 2012, cost 22,000 Truck No. 3 purchased Jan. 1, 2014, cost30,000 Truck No. 4 purchased July 1, 2014, cost 24,000 Balance, Jan. 1, 2015 $94,000 The Accumulated Depreciation-Trucks account previously adjusted to January 1, 2015, and entered in the ledger, had a balance on that date of $30, 300 (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, 2015. Transactions between January 1, 2015, and December 31, 2018, which were recorded in the ledger, are as follows uly 1, 2015 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 credt to Cash, $22,000. The transaction has cerl substance. an. 1, 2016 Truck No. 1 was sold for $3,500 cash; entry debited Cash and credited Trucks, $3,500 uly 1, 2017 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.) uly 1, 2017 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 nes a debit to Cash, S3,200ard credits to Miscellaneous income, sroo. and Trucks, S2.500 Entries for straight-line depreciation had been made at the close of each year as foliows: 2015, $21,000; 2016,$22,500; 2017, $25,050; 2018, $30,400 For each of the 4 years, compute separately the increase or decrease in net income arising from the company's errors determining or enteng 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 e.g. -45 or parentheses e.g. (45).) Per Company Books As Adjusted Trucks dr. (or.) Ace. Dep. Trucks dr. arnings dr. Trucks dr AcE. Dep. (er.) Trucks dr, Earnings de, Overstated (Understated) 1/1/15 Balance 7/1/5 Purchase Truck 5 Trade Truck3 12/31/15 Depreciation 2/31/15 Balances 1/1/16 Sale of Truck 12/31/16 Depreciation 12/31/16 Balances 7/1/17Purchase of Truck ae 7/1/17 Disposal of Truck .4 2/31/17 Depreciation 12/31/17 Balances 2/31/18 Depreciation 2/31/18 Balance Prepare one compound journal entry as of December 31, 2018, for adustment of the T schedule, assuming that the books have not been closed for 2018. (If mo entry is reguired, select "No Entry" for the the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Trucks account to reflect the correct balances as revealed by your account titles and enter 0 for Account Titles and Explanation Debit Credit Question Attempts: Unlimited