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 years audit working papers. HW10.jpg 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 companys policy is to take one half-years depreciation on all asset additions and disposals during the year. Your audit revealed the following information: 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 bid 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). 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. 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. Harbor City donated land and a building 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. 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. Computations should be rounded off to the nearest dollar. Use a separate adjusting journal entry for each of the preceding four paragraphs. (AICPA, adapted) The chart of accounts for the company includes the following accounts: Land Buildings Machinery and Equipment Land Improvements Accumulated Depreciation Buildings Accumulated Depreciation Land Improvements Accumulated Depreciation Machinery and Equipment Depreciation Expense Gain on Construction of Building Loss on sale of Machinery and Equipment Donation Revenue Adjusting Entries: Item Account Debit/Credit Amount 1. $ $ $ $ 2. $