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