You are engaged in the audit of the financial statements of Micro Corporation for the year ended December 31, 20x6. The accompanying analyses of the Property, Plant, and Equipment and related accumulated depreciation accounts have been prepared by the chief accountant of the client. You have traced the beginning balances to your prior year's audit working papers, MICRO CORPORATION Analysis of Property, plant, and Iquipment and Related Accumulated Depreciation Accounts Year Ended December 31, 20X6 Final Assets Description 12/01/ Additions Retirements Land $422,500 $5,000 Buildings 120,000 17,500 Machinery and equipment 385.000 40,400 526,000 5927,500 $62,900 526,000 Per Ledger 12/31/X6 $427,500 137,500 399 400 5964,600 Final Accumulated Depreciation Per Ledger Description 12/11/15 Additions Retirements 12/31/X6 Buildings 560,000 $5,150 565, 150 Machinery and equipment 122,250 39,220 212, 470 6223,250 544,370 52774620 *Depreciation expense for the year. 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; all other items, 10 years. The company's policy is to take one half year's depreciation on all asset additions and disposals during the year Your audit revealed the following information: 1. The company completed the construction of a wing on the plant building on June 30. The service life of the building was not extended by this addition. The lowest construction bld received was $17.500, the amount recorded in the Buildings account. Company personnel constructed the addition at a cost of $16,000 (materials. $7,500, labor $5,500, and overhead, $3,000). 2. On August 18, $5,000 was paid for paving and fencing a portion of land owned by the company and used as a parking lot for employees. The expenditure was charged to the Land account 3. The amount shown in the machinery and equipment asset retirement column represents cash received on September 5 upon disposal of a machine purchased in July 20x2 for $48,000. The chief accountant recorded depreciation expense of $3,500 on this machine in 20x6. 4. Harbor City donated land and a bullding appraised at $100,000 and $400,000, respectively. to Micro Corporation for a plant on September 1, the company began operating the plant. Since no costs were involved, the chief accountant made no entry for the above transaction. Required: Prepare the adjusting journal entries that you would propose at December 31, 20X6, to adjust the accounts for Disregard income tax Implications. The accounts have not been closed. (If no entry is required for a transactic journal entry required" in the first account field. Do not round any division. Round your answers to the near View transaction list Journal entry worksheet Record the entry to correct the August 13, 20x6 entry for the paving and fencing of the parking lot, and to provide the depreciation thereon Debit Credit Note: Inter debits before credits Transaction General Journal 2 Land improvements Depreciation expense Accumulated depreciation Land improvements Land Record entry Clear entry View general Journal Required: Prepare the adjusting Journal entries that you would propose at December 31, 20X6, to adjust the accounts for the above transactions Disregard income tax implications. The accounts have not been closed. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round any division. Round your answers to the nearest dollar amount.) View transaction list Journal entry worksheet > Record the entry to correct the September 5, 20x6 entry for the disposal of the machine and the depreciation thereon. Note: Enter debits before credits Debit Credit Transaction General Journal 3 Accumulated depreciation Machinery and equipment Loss on sale of machinery and equipment Machinery and equipment Depreciation expense Record entry Clear entry View general journal Required: Prepare the adjusting journal entries that you would propose at December 31, 20X6, to adjust the accounts for the above transactions. Disregard Income tax implications. The accounts have not been closed. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round any division. Round your answers to the nearest dollar amount.) View transaction that Journal entry worksheet D tes Record the entry for the appraised value of the land and building donated by Harbor City, and the depreciation of the building thereon. Note: Enter debits before credits Debit Credit Transaction General Journal Land Buildings Depreciation expense Paid-in capital from donated assets Accumulated depreciation Buildings Record entry Clear entry View general Journal