A depreciation schedule for semi-trucks of Windsor 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 $19,440 23.760 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 32.400 25.920 $101.520 The Accumulated Depreciation Trucks account previously adjusted to January 1, 2018, and entered in the ledger, tad a balance on that date of $32,616 (depreciation on the four truckstrom the respective dates of purchase, based on a year life, no salvagnvalul 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 lodget, are as follows July 1, 2018 Truck No. 3 was traded for a larger one (No. 5)the agreed purchase price of which was 541.200, Windsor paid the automobile dealer $23.760 cash on the transaction. The entry was a debit to Trucks and a credit to ask $23.760. The transaction has commercial substance The Accumulated Depreciation-Trucks account previously adjusted to January 1, 2018, and entered in the ledger had a balance on that date of $32,616 (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 Truck No. 3 was traded for a larger one (No. 5), the agreed purchase price of which was $43,200. Windsor, paid the automobile dealer $23.760 cash on the transaction. The entry was a debit to Trucks and a credit to Cash, $23,760. The transaction has commercial substance. Jan. 1. 2019 Truck No. 1 was sold for $3,780 cash: entry debited Cash and credited Trucks, $3,780. July 1, 2020 A new truck (No. 6) was acquired for $45,360 cash and was charged at that amount to the Trucks account. (Assume truck No. 2 was not retired.) July 1, 2020 Truck No. 4 was damaged in a wreck to such an extent that it was sold as junk for $756 cash. Windsor received $2,700 from the insurance company. The entry made by the bookkeeper was a debit to Cash, $3,456, and credits to Miscellaneous Income, $756, and Trucks. $2,700. Entries for straight-line depreciation had been made at the close of each year as follows: 2018. $22,680, 2019, $24.300, 2020, $27.054: 2021. $32,832. Entries for straight-line depreciation had been made at the close of each year as follows: 2018. $22.680:2019. $24.300: 2020, $27,054 2021. $32,832 (a) - Your answer is partially correct. 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 as 45 or parentheses es (451) Per Company Books Trucks dr. Ir.) Acc. Dep. Trucks dr.(cr.) Retained Earr 1/1/18 Balance 101.520 (326161 7/1/18 Purchase Truck #5 23.760 Trade Truck 3 12/31/18 Depreciation 122.6001 12/31/18 Balances 125200 (55296) Trucks dr. (cr.) Acc. Dep. Trucks dr. (er.) Retained Eart 1/1/18 Balance $ 101,520 $ (32.616) 7/1/18 Purchase Truck #5 23.760 Trade Truck #3 12/31/18 Depreciation 122,680) 12/31/18 Balances 125280 155296) 1/1/19 Sale of Truck #1 (3,780) 12/31/19 Depreciation (24,300) 12/31/19 Balances 121500 179596) 7/1/20 Purchase of Truck #6 45,360 7/1/20 Disposal of Truck #4 2.700 12/31/20 Depreciation 0 127,054) 12/31/20 Balances 164160 (106650) Retained Earnings dr. cr.) Trucks dr.(cr.) Ace. Dep., Trucks dr, (er.) Retained Earn $ 101.520 (32.616) 43.200 (32.400) 32.400 22680 22680 112320 19008 19008 19008 24,300 19008 46980 121500 1 1 27,054 Question 2 of 7 0.59/2 III cks dr.(cr.) Acc. Dep., Trucks dr. (cr.) Retained Earnings dr. (cr.) Income Overstated (Understated) 101,520 $ (32,616) $ 43,200 i (32,400) 32,400 3240 3240 32.400 32.400 112320 19008 19008 19008 19008 19008 19008 19008 19008 121500 12/31/19 Depreciation 124.3000 12/31/19 Balances 12500 (79596) 7/1/20 Purchase of Truck #6 45.360 7/1/20 Disposal of Truck #4 2.700 12/31/20 Depreciation 0 127.054) 12/31/20 Balances 164160 (106650) TULEE 12/31/21 Depreciation 0 (32,8321 12/31/21 Balance 164160 (139482) A depreciation schedule for semi-trucks of Windsor 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 $19,440 23.760 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 32.400 25.920 $101.520 The Accumulated Depreciation Trucks account previously adjusted to January 1, 2018, and entered in the ledger, tad a balance on that date of $32,616 (depreciation on the four truckstrom the respective dates of purchase, based on a year life, no salvagnvalul 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 lodget, are as follows July 1, 2018 Truck No. 3 was traded for a larger one (No. 5)the agreed purchase price of which was 541.200, Windsor paid the automobile dealer $23.760 cash on the transaction. The entry was a debit to Trucks and a credit to ask $23.760. The transaction has commercial substance The Accumulated Depreciation-Trucks account previously adjusted to January 1, 2018, and entered in the ledger had a balance on that date of $32,616 (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 Truck No. 3 was traded for a larger one (No. 5), the agreed purchase price of which was $43,200. Windsor, paid the automobile dealer $23.760 cash on the transaction. The entry was a debit to Trucks and a credit to Cash, $23,760. The transaction has commercial substance. Jan. 1. 2019 Truck No. 1 was sold for $3,780 cash: entry debited Cash and credited Trucks, $3,780. July 1, 2020 A new truck (No. 6) was acquired for $45,360 cash and was charged at that amount to the Trucks account. (Assume truck No. 2 was not retired.) July 1, 2020 Truck No. 4 was damaged in a wreck to such an extent that it was sold as junk for $756 cash. Windsor received $2,700 from the insurance company. The entry made by the bookkeeper was a debit to Cash, $3,456, and credits to Miscellaneous Income, $756, and Trucks. $2,700. Entries for straight-line depreciation had been made at the close of each year as follows: 2018. $22,680, 2019, $24.300, 2020, $27.054: 2021. $32,832. Entries for straight-line depreciation had been made at the close of each year as follows: 2018. $22.680:2019. $24.300: 2020, $27,054 2021. $32,832 (a) - Your answer is partially correct. 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 as 45 or parentheses es (451) Per Company Books Trucks dr. Ir.) Acc. Dep. Trucks dr.(cr.) Retained Earr 1/1/18 Balance 101.520 (326161 7/1/18 Purchase Truck #5 23.760 Trade Truck 3 12/31/18 Depreciation 122.6001 12/31/18 Balances 125200 (55296) Trucks dr. (cr.) Acc. Dep. Trucks dr. (er.) Retained Eart 1/1/18 Balance $ 101,520 $ (32.616) 7/1/18 Purchase Truck #5 23.760 Trade Truck #3 12/31/18 Depreciation 122,680) 12/31/18 Balances 125280 155296) 1/1/19 Sale of Truck #1 (3,780) 12/31/19 Depreciation (24,300) 12/31/19 Balances 121500 179596) 7/1/20 Purchase of Truck #6 45,360 7/1/20 Disposal of Truck #4 2.700 12/31/20 Depreciation 0 127,054) 12/31/20 Balances 164160 (106650) Retained Earnings dr. cr.) Trucks dr.(cr.) Ace. Dep., Trucks dr, (er.) Retained Earn $ 101.520 (32.616) 43.200 (32.400) 32.400 22680 22680 112320 19008 19008 19008 24,300 19008 46980 121500 1 1 27,054 Question 2 of 7 0.59/2 III cks dr.(cr.) Acc. Dep., Trucks dr. (cr.) Retained Earnings dr. (cr.) Income Overstated (Understated) 101,520 $ (32,616) $ 43,200 i (32,400) 32,400 3240 3240 32.400 32.400 112320 19008 19008 19008 19008 19008 19008 19008 19008 121500 12/31/19 Depreciation 124.3000 12/31/19 Balances 12500 (79596) 7/1/20 Purchase of Truck #6 45.360 7/1/20 Disposal of Truck #4 2.700 12/31/20 Depreciation 0 127.054) 12/31/20 Balances 164160 (106650) TULEE 12/31/21 Depreciation 0 (32,8321 12/31/21 Balance 164160 (139482)
