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Question: you are engaged in the audit of the financial statements...

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You are engaged in the audit of the financial statements of Holman 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 HOLMAN CORPORATION Analysis of Property, Plant, and Equipment and Related Accumulated Depreciation Accounts Year Ended December 31, 20x6 Final Assets Per Ledger 12/31/X5Additions Retirements 12/31/x6 $431,500 Description Land Buildings Machinery and equipment $ 5,600 20,500 41,600 67,700 $437,100 146,500 405,100 $988,700 126,000 391,000 $27,500 $27,500 $948,500 Accumulated Depreciation 12/31/x5 Additions Retirements 12/31/x6 Final Per Ledger Description Buildings Machinery and equipment 63,000 175,950 $238,950 $ 5,450 40,385 $45,835 68,450 216,335 $284,785 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 companys policy is to take one half-years depreciation on all asset additions and disposals during the year. Your audit revealed the following information1. 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 $19,900, the amount recorded in the Buildings account. Company personnel constructed the addition at a cost of $17,800 (materials, $8,100; labor, $6,100; and overhead, $3,600) employees. The expenditure was charged to the Land account. disposal of a machine purchased in July 20X2 for $50,000. The chief accountant recorded depreciation expense of $3,500 on 2. On August 18, $5,600 was paid for paving and fencing a portion of land owned by the company and used as a parking lot for 3. The amount shown in the machinery and equipment asset retirement column represents cash received on September 5 upon this machine in 20X6 4. Harbor City donated land and a building appraised at $160,000 and $460,000, respectively, to Holman 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 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.)Journal entry worksheet Record the entry to correct the June 30, 20X6 entry for the addition to the building and to correct depreciation. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general journal

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