Kawasaki Company shows the following entries in its Equipment account for 2016. All amounts (in yen, in thousands) are based on historical cost.

Instructions

(a) Prepare any correcting entries necessary.

(b) Assuming that depreciation is to be charged for a full year on the ending balance in the asset account, compute the proper depreciation charge for 2016 under each of the methods listed below.
Assume an estimated life of 10 years, with no residual value. The machinery included in the January 1, 2016, balance was purchased in 2014.
(1) Straight-line.
(2) Sum-of-the-years’-digits.

Transcribed Image Text:

2016 Jan. 1 Balance Aug. 10 Purchases 12 Freight on equipment purchased 25 Installation costs Nov. 10 Repairs Equipment 2016 133,000 June 30 32,000 700 2,500 500 Cost of equipment sold (purchased prior to 2016) 23,000