You are engaged in the audit of the financial statements of Micro Corporation for the year...

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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 Equipment and Related Accumulated Depreciation Accounts Year Ended December 31, 20X6 Description Land Buildings Machinery and equipment Description Buildings Machinery and equipment *Depreciation expense for the year. Final 12/31/X5 Assets Per Ledger Additions Retirements 12/31/X6 $449,500 $6,800 $456,300 138,000 26,500 164,500 403,000 44,000 $33,500 413,500 $990,500 $77,300 $33,500 $1,034,300 Final 12/31/X5 Accumulated Depreciation Per Ledger Additions* Retirements 12/31/X6 $69,000 $6,050 181,350 42,715 $250,350 $48,765 $75,050 224,065 $299,115 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 bid received was $26,500, the amount recorded in the Buildings account. Company personnel constructed the addition at a cost of $21,400 (materials, $9,300; labor, $7,300; and overhead, $4,800). 2. On August 18, $6,800 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 $62,000. The chief accountant recorded depreciation expense of $4,700 on this machine in 20X6. 4. Harbor City donated land and a building appraised at $280,000 and $580,000, 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. Journal entry worksheet < A B C 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. Transaction 4 General Journal Debit Credit View general journal Record entry Clear entry 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 Equipment and Related Accumulated Depreciation Accounts Year Ended December 31, 20X6 Description Land Buildings Machinery and equipment Description Buildings Machinery and equipment *Depreciation expense for the year. Final 12/31/X5 Assets Per Ledger Additions Retirements 12/31/X6 $449,500 $6,800 $456,300 138,000 26,500 164,500 403,000 44,000 $33,500 413,500 $990,500 $77,300 $33,500 $1,034,300 Final 12/31/X5 Accumulated Depreciation Per Ledger Additions* Retirements 12/31/X6 $69,000 $6,050 181,350 42,715 $250,350 $48,765 $75,050 224,065 $299,115 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 bid received was $26,500, the amount recorded in the Buildings account. Company personnel constructed the addition at a cost of $21,400 (materials, $9,300; labor, $7,300; and overhead, $4,800). 2. On August 18, $6,800 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 $62,000. The chief accountant recorded depreciation expense of $4,700 on this machine in 20X6. 4. Harbor City donated land and a building appraised at $280,000 and $580,000, 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. Journal entry worksheet < A B C 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. Transaction 4 General Journal Debit Credit View general journal Record entry Clear entry