7. On January 2, 2018, the Jackson Company purchased equipment to be used in its manufacturing process. The equipment has an estimated life of eight years and an estimated residual value of $56,625. The expenditures made to acquire the asset were as follows:

Purchase price	$	242,000
Freight charges		8,400
Installation charges		12,000

Jacksons policy is to use the double-declining-balance (DDB) method of depreciation in the early years of the equipments life and then switch to straight line halfway through the equipments life. Required:

1. Calculate depreciation for each year of the assets eight-year life.

	Depreciation for the Period End of Period Year Beginning of Period Book Value Depreciation Rate Annual Depreciation Accumulated Depreciation Book Value 2018 ? ? % ? ? ? 2019 ? ? % ? ? ? 2020 ? ? % ? 2021 ? ? % ? 2022 ? ? 2023 ? 2024 ? 2025 ? Total

8. In 2018, internal auditors discovered that PKE Displays, Inc., had debited an expense account for the $369,000 cost of equipment purchased on January 1, 2015. The equipments life was expected to be five years with no residual value. Straight-line depreciation is used by PKE.

Required: 1. Prepare the correcting entry assuming the error was discovered in 2018 before the adjusting and closing entries. (Ignore income taxes.) 2. Assume the error was discovered in 2020 after the 2019 financial statements are issued. Prepare the correcting entry.

Prepare the correcting entry assuming the error was discovered in 2018 before the adjusting and closing entries. (Ignore income taxes.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)