Presented below is information related to Riverbed Company. 1. On July 6, Riverb
ID: 2550814 • Letter: P
Question
Presented below is information related to Riverbed Company.
1. On July 6, Riverbed Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is:
$389,000
1,167,000
Riverbed Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $225 per share on the date of the purchase of the property.
2. Riverbed 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, $278,200, subject to a 2% cash discount, and freight on equipment of $11,110.
Prepare entries on the books of Riverbed 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$389,000
Buildings1,167,000
Equipment 778,000 Total $2,334,000Explanation / Answer
No Account titles and explanation Debit Credit 1 Land 478125 Building 1406250 Equipment 928125 Common stock (12500*100) 1250000 Paid in capital in excess of par (12500*125) 1562500 (Note:1) 2 Building (95850+173080) 268930 Equipment 137160 Land improvements 123590 Land 18650 Cash 548330 3 Equipment (278200*0.98)+11110 283746 Cash 283746 Notes: 1. Cost of all assets should be 12500*225=2812500 Appraised Value Weight Land 389000 0.17 (389000/2334000) Building 1167000 0.50 (1167000/2334000) Equipment 778000 0.33 (778000/2334000) 2334000 1.00 Cost of land=2812500*0.17=478125 Cost of building=2812500*0.50=1406250 Cost of equipment=2812500*0.33=928125