E10-12 (Entries for Asset Acquisition, Including Self-Construction)Below are transactions related to Fred Couples Company.
(a) The City of Pebble Beach gives the company 5 acres of land as aplant site. The market value of this land is determined to be $81,000.
(b) 13,000 shares of common stock with a par value of $50 per shareare issued in exchange for land and buildings. The property has been appraised at a fair marketvalue of $810,000, of which $180,000 has been allocated to land and $630,000 to buildings. Thestock of Fred Couples Company is not listed on any exchange, but a block of 100 shares was soldby a stockholder 12 months ago at $65 per share, and a block of 200 shares was sold by anotherstockholder 18 months ago at $58 per share.
(c) No entry has been made to remove from the accounts forMaterials, Direct Labor, and Overhead the amounts properly chargeable to plant asset accounts formachinery constructed during the year. The following information is given relative to costs of themachinery constructed.
Materials used $12,500
Factory supplies used 900
Direct labor incurred 15,000
Additional overhead (over regular) caused by construction 2,700
of machinery, excluding factory supplies used
Fixed overhead rate applied to regular manufacturing operations 60%of direct labor cost Cost of similar machinery if it had been purchased from outsidesuppliers 44,000
Instructions: Prepare journal entries on the books of Fred Couples Company torecord these transactions.