Wettlauffer Company Ltd. shows the following entries in its Equipment account for 2014. All amounts are based on historical cost.

Instructions
(a) Prepare any correcting entries that are necessary. 23,000
(b) Assuming that depreciation is to be charged for a full year based on the ending balance in the asset account no matter when acquired, calculate the proper depreciation charge for 2014 under both methods listed below. Assume an estimated life of 10years, with no residual value. The machinery included in the January 1, 2014 Equipment balance was purchased in 2012.
1. Straight-line
2. Declining-balance (assume twice the straight-line rate)

Transcribed Image Text:

Equipment Balance Purchases of equipment Freight on equipment purchased Installation costs Repairs 134,7506/30 Cost of equipment sold (purchased prior to 2014) 8/10 8/12 8/25 11/10 32,000 700 2,700 500 23,000