Presented below is information related to Kingbird Company. 1. On July 6, Kingbi
ID: 2550682 • Letter: P
Question
Presented below is information related to Kingbird Company.
1. On July 6, Kingbird Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is:
$372,000
1,116,000
Kingbird Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $171 per share on the date of the purchase of the property.
2. Kingbird Company expended the following amounts in cash between July 6 and December 15, the date when it first occupied the building. (Prepare consolidated entry for all transactions below.)
3. On December 20, the company paid cash for equipment, $274,800, subject to a 2% cash discount, and freight on equipment of $11,540.
Prepare entries on the books of Kingbird Company for these transactions. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 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.
2.
3.
Land$372,000
Buildings1,116,000
Equipment 744,000 Total $2,232,000Explanation / Answer
Answer
Entries on the books of Kingbird Company:
W.n.
Total market value of common stock = 12500 *$171 =$2137500
Land = $372,000 / $2,232,000 *$2137500=356250
Buildings= $1,116,000/ $2,232,000 *$2137500 =1068750
Equipment $744,000 / $2,232,000 *$2137500 =712500
Date Particulars Debit Credit 1. Land 356250 Buildings 1068750 Equipment 712500 Common stock 1250000 Paid in capital excess of par(171-100*12500) 887500 2. Building(107860+162550) 270410 Machinery and equipment 135500 Land improvements 131060 Land 19750 Cash 556720 3. Machinery and equipment (274800-2%)+11540 280844 Cash 280844Related Questions
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