Below are transactions related to Duffner Company. a. The City of Pebble Beach gives the company 5 acres of land as a plant site. The fair value of this land is determined to be $81,000. b. 13,000 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 value of $810,000, of which $180,000 has been allocated to land and $630,000 to buildings. The stock of Duffner 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 15,000 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 Instructions Prepare journal entries on the books of Duffner Company to record these transactions.
Below are transactions related to Duffner Company.
a. The City of Pebble Beach gives the company 5 acres of land as a plant site. The fair value of this land is determined to be $81,000.
b. 13,000 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 value of $810,000, of which $180,000 has been allocated to land and $630,000 to buildings. The stock of Duffner 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
| Materials used |
$12,500
|
| Factory supplies used |
900
|
| Direct labor incurred |
15,000
|
| 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
|
Instructions
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