MoClain Company incurred the following expenditures during 2016: Ap:. 9. The air conditioning system in the old manutacturing facility was replaced for $83,000. The old air conditioning system had a cost of $74,000 and a book value of \$2,000. The old air conditioning system had no scrap value. June 29 Annual maintenance of $38,000 was portormed. Sept. 12 The root of the old manufacturing tacility is replaced at a cost of s05,000. This expenditure substantially extended the life of the facility. Doc. 28 A new wing was added to the manulacturing facility at a cost of 5275.000 . This expenditure substantially increased the productive capacity of the plant. Required: 1. Prepare joumal entries to record MoClain's expenditures for 2016. 2. Next Level What is the effect on the financial statements if management had improperly accounted for the: a. addition of the now wing to the manulacturing facility b. annual maintenance expenditures Prepare joumal entries to record McClain's expenditures for 2016. Additional Instructions What is the effect on the financial statementy if management had improperly accounted for the addition of the new wing to the manulacturing facilit? If the addition had been expensed instead of capialzed, assets and net income would be in 2916 and in future periods What is the oflect on the financlal statemonts 2 management had improponty accounted for the annual maintenance expendtures? It the mainterance expenditures had been capitalzed, assets and not insome would be in the year of the expenditure. In fusure penocs, this asset would be depreciated, causing income to be