Below are transactions related to Martinez 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 $87,350. 13,000 shares of common stock with a par value of $55 per share are issued in exchange for land and buildings. The property (b) has been appraised at a fair value of $873,500, of which $175,190 has been allocated to land and $698,310 to buildings. The stock of Martinez Company is not listed on any exchange, but a block of 100 shares was sold by a stockholder 12 months ago at $71 per share, and a block of 200 shares was sold by another stockholder 18 months ago at $63 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 $11,300 Factory supplies used 846 Direct labor incurred 15,650 Additional overhead (over regular) caused by construction of machinery, excluding factory supplies used 2,587 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 45,360 Prepare journal entries on the books of Martinez Company to record these transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation Debit Credit (a) (b)
Below are transactions related to Martinez 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 $87,350. 13,000 shares of common stock with a par value of $55 per share are issued in exchange for land and buildings. The property (b) has been appraised at a fair value of $873,500, of which $175,190 has been allocated to land and $698,310 to buildings. The stock of Martinez Company is not listed on any exchange, but a block of 100 shares was sold by a stockholder 12 months ago at $71 per share, and a block of 200 shares was sold by another stockholder 18 months ago at $63 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 $11,300 Factory supplies used 846 Direct labor incurred 15,650 Additional overhead (over regular) caused by construction of machinery, excluding factory supplies used 2,587 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 45,360 Prepare journal entries on the books of Martinez Company to record these transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation Debit Credit (a) (b)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Below are transactions related to Martinez Company.
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
$87,350.
(a)
13,000 shares of common stock with a par value of $55 per share are issued in exchange for land and buildings. The property
has been appraised at a fair value of $873,500, of which $175,190 has been allocated to land and $698,310 to buildings. The
stock of Martinez Company is not listed on any exchange, but a block of 100 shares was sold by a stockholder 12 months ago
at $71 per share, and a block of 200 shares was sold by another stockholder 18 months ago at $63 per share.
(b)
(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
$11,300
Factory supplies used
846
Direct labor incurred
15,650
Additional overhead (over regular) caused by construction of
machinery, excluding factory supplies used
2,587
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
45,360
Prepare journal entries on the books of Martinez Company to record these transactions. (Credit account titles are automatically indented
when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
No. Account Titles and Explanation
Debit
Credit
(a)
(b)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education