Soon after December 31, 2017, the auditor of Blue Spruce Corp. asked the company to prepare a depreciation schedule for semi trucks that showed the additions, retirements, depreciation, and other data that affected the companys income in the four-year period from 2014 to 2017, inclusive. The following data were obtained.

Balance of Trucks account, January 1, 2014:
Truck no. 1, purchased Jan. 1, 2011, cost		$18,000
Truck no. 2, purchased July 1, 2011, cost		26,000
Truck no. 3, purchased Jan. 1, 2013, cost		30,000
Truck no. 4, purchased July 1, 2013, cost		24,000
Balance, January 1, 2014		$98,000

The account Accumulated DepreciationTrucks had a correct balance of $32,200 on January 1, 2014. (This includes depreciation on the four trucks from the respective dates of purchase, based on a 5-year life, with no residual value.) No charges had been made against the account before January 1, 2014. Transactions between January 1, 2014, and December 31, 2017, and their records in the ledger were as follows:

July 1, 2014		Truck no. 3 was traded for a larger one (no. 5). The agreed purchase price (fair value) was $34,000. Blue Spruce paid the automobile dealer $15,000 cash on the transaction. The entry was a debit to Trucks and a credit to Cash, $15,000.
Jan. 1, 2015		Truck no. 1 was sold for $3,000 cash. The entry was a debit to Cash and a credit to Trucks, $3,000.
July 1, 2016		A new truck (no. 6) was acquired for $40,000 cash and was charged at that amount to the Trucks account. (Assume truck no. 2 was not retired.)
July 1, 2016		Truck no. 4 was so badly damaged in an accident that it was sold as scrap for $800 cash. Blue Spruce received $2,000 from the insurance company. The entry made by the bookkeeper was a debit to Cash, $2,800, and credits to Gain on Disposal of Trucks, $800, and Trucks, $2,000.

Entries for depreciation were made at the close of each year as follows: 2014, $21,300; 2015, $22,100; 2016, $24,900; and 2017, $28,800.

Soon after December 31, 2017, the auditor of Blue Spruce Corp. asked the company to prepare a depreciation schedule for semi trucks that showed the additions, retirements, depreciation, and other data that affected the company's income in the four-year period from 2014 to 2017, inclusive. The following data were obtained Balance of Trucks account, January 1, 2014: Truck no. 1, purchased Jan. 1, 2011, cost Truck no. 2, purchased July 1, 2011, cost Truck no. 3, purchased Jan. 1, 2013, cost Truck no. 4, purchased July 1, 2013, cost $18,000 26,000 30,000 24,000 $98,000 Balance, January 1, 2014 The account Accumulated Depreciation Trucks had a correct balance of $32,200 on January 1, 2014. (This includes depreciation on the four trucks from the respective dates of purchase, based on a 5-year life, with no residual value.) No charges had been made against the account before January 1, 2014 Transactions between January 1, 2014, and December 31, 2017, and their records in the ledger were as follows: July 1, 2014 Truck no. 3 was traded for a larger one (no. 5). The agreed purchase price (fair value) was $34,000. Blue Spruce paid the automobile dealer $15,000 cash on the transaction. The entry was a debit to Trucks and a credit to Cash, $15,000 an. 1, 2015 Truck no. 1 was sold for $3,000 cash. The entry was a debit to Cash and a credit to Trucks, $3,000. Duly 1, 2016 A new truck (no. 6) was acquired for $40,000 cash and was charged at that amount to the Trucks account. (Assume truck no. 2 was not retired.) July 1, 2016 Truck no. 4 was so badly damaged in an accident that it was sold as scrap for $800 cash. Blue Spruce received $2,000 from the insurance company. The entry made by the bookkeeper was a debit to Cash, $2,800, and credits to Gain on Disposal of Trucks, $800, and Trucks, $2,000. Entnes for depreciation were made at the close of each year as follows: 2014, $21,300; 2015. $22,100; 2016, s24,900, and 2017, s28,800 Your answer is partially correct. Try again. For each of the four years, calculate separately the increase or decrease in net income that is due to the company's errors in determining or entering depreciation or in recording transactions affecting the trucks. Ignore income tax Per Company Books As Adjusted Accumulated Depreciation - Accumulated Retained Earnings Dr. (Cr.) Retained Earnings Dr. (Cr.) Net Income Trucks Trucks Dr. (Cr.) Dr. (Cr.) Dr. (Cr.) Dr. (Cr.) 1/1/14 322001 6000 322001 Balanoe Ed5000 "b 7/1/14 Purchase Truck #5 Trade Truck #3 12/31/14 Depreciation (25410) 23958) 1452) 12/3114 Balances 14360 (61952) 1/1/15 Sale of Truck #1 12/31/15 Depreciation 12/31/15Balances 7/1/16 Purchase of T ck #6 7/1/16 Disposal of Truck #4 12/31/16 Depreciation 12/31/16 Balances 12/31/17 Depreciation 12/31/17 Balances Total understatement of income Soon after December 31, 2017, the auditor of Blue Spruce Corp. asked the company to prepare a depreciation schedule for semi trucks that showed the additions, retirements, depreciation, and other data that affected the company's income in the four-year period from 2014 to 2017, inclusive. The following data were obtained Balance of Trucks account, January 1, 2014: Truck no. 1, purchased Jan. 1, 2011, cost Truck no. 2, purchased July 1, 2011, cost Truck no. 3, purchased Jan. 1, 2013, cost Truck no. 4, purchased July 1, 2013, cost $18,000 26,000 30,000 24,000 $98,000 Balance, January 1, 2014 The account Accumulated Depreciation Trucks had a correct balance of $32,200 on January 1, 2014. (This includes depreciation on the four trucks from the respective dates of purchase, based on a 5-year life, with no residual value.) No charges had been made against the account before January 1, 2014 Transactions between January 1, 2014, and December 31, 2017, and their records in the ledger were as follows: July 1, 2014 Truck no. 3 was traded for a larger one (no. 5). The agreed purchase price (fair value) was $34,000. Blue Spruce paid the automobile dealer $15,000 cash on the transaction. The entry was a debit to Trucks and a credit to Cash, $15,000 an. 1, 2015 Truck no. 1 was sold for $3,000 cash. The entry was a debit to Cash and a credit to Trucks, $3,000. Duly 1, 2016 A new truck (no. 6) was acquired for $40,000 cash and was charged at that amount to the Trucks account. (Assume truck no. 2 was not retired.) July 1, 2016 Truck no. 4 was so badly damaged in an accident that it was sold as scrap for $800 cash. Blue Spruce received $2,000 from the insurance company. The entry made by the bookkeeper was a debit to Cash, $2,800, and credits to Gain on Disposal of Trucks, $800, and Trucks, $2,000. Entnes for depreciation were made at the close of each year as follows: 2014, $21,300; 2015. $22,100; 2016, s24,900, and 2017, s28,800 Your answer is partially correct. Try again. For each of the four years, calculate separately the increase or decrease in net income that is due to the company's errors in determining or entering depreciation or in recording transactions affecting the trucks. Ignore income tax Per Company Books As Adjusted Accumulated Depreciation - Accumulated Retained Earnings Dr. (Cr.) Retained Earnings Dr. (Cr.) Net Income Trucks Trucks Dr. (Cr.) Dr. (Cr.) Dr. (Cr.) Dr. (Cr.) 1/1/14 322001 6000 322001 Balanoe Ed5000 "b 7/1/14 Purchase Truck #5 Trade Truck #3 12/31/14 Depreciation (25410) 23958) 1452) 12/3114 Balances 14360 (61952) 1/1/15 Sale of Truck #1 12/31/15 Depreciation 12/31/15Balances 7/1/16 Purchase of T ck #6 7/1/16 Disposal of Truck #4 12/31/16 Depreciation 12/31/16 Balances 12/31/17 Depreciation 12/31/17 Balances Total understatement of income