1. On July 6, Splish Company acquired the plant assets of Doonesbury Company, wh

Question

1. On July 6, Splish Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is: Land Buildings Equipment 5367,000 1,101,000 734,000 $2,202,000 Total Splish Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $188 per share on the date of the purchase of the property 2. Splish Company expended the following amounts in cash betwcen July 6 and December 15, the date when it first occupied the building. (Prepare consolidated entry for all transactions below.) $112,950 125,200 131,560 165,140 16,740 Repairs to building Constructlon of bases for equlpment to be installed later Driveways and parking lots Remodeling of office space in building, including new partitions and walls Special assssment by city on land 3. On December 20, the company paid cash for equipment, $269,700, subject to a 2% cash discount, and freight on equipment of $11,200 Prepare cntrics on the books of Splish Company for these transactions, (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to o decimal places e.g. 58,971 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 1.

Explanation / Answer

Working:

Total cost = 12500 shares x $188 = $2350000

No. Account Titles and Explanation Debit Credit 1 Land 391667 Buildings 1175000 Equipment 783333 Common stock (12500 x $100) 1250000 Paid-in capital in excess of par (12500 x $88) 1100000 2 Land 16740 Land improvements 131560 Repairs expense ($112950 + $165140) 278090 Equipment 125200 Cash 551590 3 Equipment 275506 Cash [(98% x $269700) + $11200] 275506

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