On its 2019 income statement, American Airlines reported a gain of $102 million on sale of property and equipment that the company had used for the prior five years. For an accurate year by year assessment, we want to adjust American Airlines financial statements for each of the past five years (including the current year). Assume that the companys tax rate is 22%. a. For the income statement effects related to the gain on asset disposal, identify with numbers the adjustments for each of the five years 2015 to 2019 for the following line items. Note: Use a negative sign to indicate if an adjustment decreases an account balance. 2015 2016 2017 2018 2019 Current Year Adjustments

Gain on Disposal (reversal) Tax Expense (reversal) Net Income (reversal)

Allocation of Gain Adjustments

Depreciation Expense

Tax expense

Net Income

b. For the balance sheet effects related to the gain on asset disposal, identify with numbers the adjustments for each of the five years 2015 to 2019 for the following line items. Note: Use a negative sign to indicate if an adjustment decreases an account balance.

Accumulated Depreciation

Deferred Tax Liability

Retained Earnings