ACC$451$ Audit Project $-$ Cyprus Corporation

Your firm is engaged to perform the audit of the financial statements of Cyprus Corporation for the year ended December $31,2023.$ Cyprus began business in $2015.$ As a first year staff, you have been tasked with performing the procedures in connection with the property section of the audit. You received a PBC from the client containing an analysis of the Property, Plant, and Equipment and related accumulated depreciation accounts, including additions and retirements $($see PBC schedule in the workbook you are provided$).$ You have already completed the first task in the audit program by tracing the beginning balances on the PBC to your prior year's audit working papers,

All plant assets are depreciated on the straight$-$line basis $($no residual value taken into consideration$)$ based on the following estimated service lives: building, $25$ years; and all other items, $10$ years. The company policy states that depreciation begins in the month the asset is placed in service and no depreciation is taken in month of disposal.

Your audit revealed the following information:

On November $1,$ the company entered into a $10-$year lease contract for a die casting machine, with annual rentals of $$7,000$ payable in advance on November $1$ of each year. The property was placed in service on December $1.$ The Company treated the lease as an operating lease for financial statement purposes; however, you determined the lease should be treated as a capital lease. The estimated service life of the machine is $10$ years with no residual value. The company's current cost of funds is $6\%.$

The company completed the construction of a new building in January and placed the asset in service on May $1,2023.$ The entire balance in the CIP account pertains to the building.

On September $18,$$$8,000$ was paid for paving and fencing a portion of land owned by the company and used as a parking lot for employees $($i$.$e$.,$ land improvements$).$ The expenditure was charged to the Land account.

The amount shown in the machinery and equipment asset retirement column $($$$25,000)$ represents cash received on September $5$ upon disposal of a machine purchased March $1,2019$ for $$60,000.$ The chief accountant recorded depreciation expense of $$6,000$ on this machine in $2023.$

The $$17,750$ capitalized to the building account was for roof repairs after a recent hurricane. It did not approve the asset or extend its useful life. The company recorded $$4,260$ of deprecistion on this addition in the current year.

Required:

On the worksheet provided. Prepare the adjusting joumal entries that you would propose at December $31,2023,$ to adjust the accounts for the above transactions. Computations should be rounded to the nearest dollar. Use a separate adjusting journal entry for each of the preceding five paragraphs.

Complete an $"$AS ADJUSTED" fixed asset rollforward schedule.