On January 1, 2020, Katsumi Company purchased and installed a telephone system at a cost of $ 20,000. The equipment was expected to last five years with a residual value of $ 3,000. On January 1, 2021 more telephone equipment was purchased to compliment the current system for $ 8,000. The new equipment is expected to have a useful life of four years. Through an error, the new equipment was debited to Telephone Expense. Katsumi Company uses the straight-line method of depreciation.
Instructions
Prepare a schedule showing the effects of the error on Telephone Expense, Depreciation Expense, and profit for each year and in total beginning in 2021 through the useful life of the new equipment.

Question

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The Answer of On January 1, 2020, Katsumi Company purchased and installed a telephone system at a cost of $ 20,000. The equipment was expected to last five years with a residual value of $ 3,000. On January 1, 2021 more telephone equipment was purchased to compliment the current system for $ 8,000. The new equipment is expected to have a useful life of four years. Through an error, the new equipment was debited to Telephone Expense. Katsumi Company uses the straight-line method of depreciation.
Instructions
Prepare a schedule showing the effects of the error on Telephone Expense, Depreciation Expense, and profit for each year and in total beginning in 2021 through the useful life of the new equipment.

On January 1, 2020, Katsumi Company Purchased and Installed a Telephone