entries for asset acquisition including self construction 457662

Below are transactions related to Impala Company.

(a) The City of Pebble Beach gives the company 5 acres of land as a plant site. The market value of this land is determined to be $81,000.

(b) 14,000 shares of common stock with a par value of $50 per share are issued in exchange for land and buildings. The property has been appraised at a fair market value of $810,000, of which $180,000 has been allocated to land and $630,000 to buildings. The stock of Impala Company is not listed on any exchange, but a block of 100 shares was sold by a stockholder 12 months ago at $65 per share, and a block of 200 shares was sold by another stockholder 18 months ago at $58 per share.

(c) No entry has been made to remove from the accounts for Materials, Direct Labor, and Overhead the amounts properly chargeable to plant asset accounts for machinery constructed during the year. The following information is given relative to costs of the machinery constructed.

Materials used $12,500

Factory supplies used 900

Direct labor incurred 16,000

Additional overhead (over regular) caused by construction

of machinery, excluding factory supplies used 2,700

Fixed overhead rate applied to regular manufacturing operations 60% of direct labor cost

Cost of similar machinery if it had been purchased from outside suppliers 44,000

Prepare journal entries on the books of Impala Company to record these transactions. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

Description/Account Debit Credit

(a) Direct laborMaterialsFactory overheadLandContribution revenueBuildingsCommon stockPaid in capital in excess of parMachinery

Common stockDirect laborMaterialsFactory overheadContribution revenuePaid in capital in excess of parLandBuildingsMachinery

(b) MaterialsDirect laborFactory overheadCommon stockPaid in capital in excess of parMachineryBuildingsLandContribution revenue

Contribution revenueMaterialsCommon stockFactory overheadPaid in capital in excess of parBuildingsMachineryLandDirect labor

LandContribution revenueDirect laborFactory overheadCommon stockBuildingsMachineryPaid in capital in excess of parMaterials

Common stockMachineryBuildingsMaterialsDirect laborFactory overheadPaid in capital in excess of parLandContribution revenue

(c) Paid in capital in excess of parMaterialsContribution revenueDirect laborBuildingsCommon stockFactory overheadMachineryLand

BuildingsCommon stockPaid in capital in excess of parMaterialsContribution revenueFactory overheadDirect laborLandMachinery

Paid in capital in excess of parLandBuildingsFactory overheadContribution revenueCommon stockMaterialsDirect laborMachinery

Factory overheadCommon stockMaterialsBuildingsLandPaid in capital in excess of parMachineryDirect laborContribution revenue