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
Final
Assets
Per Ledger
Description
12/31/X5
Additions Retirements
12/31/X6
Land
$440,500
$6,200
$446,700
Buildings
132,000
23,500
155,500
Machinery and equipment
397,000
42,800
$30,500
409,300
$969,500
$72,500
$30,500
$1,011,500
Final
Accumulated Depreciation Per Ledger
Description
12/31/X5
Additions* Retirements
12/31/X6
Buildings
$66,000
$5,750
$71,750
Machinery and equipment
178,650
41,550
220,200
$244,650
$47,300
$291,950
*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.
