Wettlauffer Company Ltd. shows the following entries in its Equipment account for 2017. All amounts are based on historical cost.

Instructions
(a) Prepare any correcting entries that are necessary.
(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 2017 under both methods listed below. Assume an estimated life of 10 years for all equipment at the time of acquisition, with no residual value. The equipment included in the January 1, 2017 Equipment balance was purchased in 2015.
1. Straight-line
2. Declining-balance (assume twice the straight-line rate)

Transcribed Image Text:

Equipment 1/1 Balance 8/10 Purchases of equipment 8/12 Freight on equipment purchased 8/25 Installation costs 11/10 Repairs 134,7506/30 Cost of equipment sold 32,000 700 2,700 500 (purchased prior to 2017) 23,000