Presented below is information related to Kingbird Company 1. On July 6, Kingbir
ID: 340810 • 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:
Land. $ 396,000
Building. 1,188,000
Equipment 792,000
total. 2,376,000
Kingbird Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $252 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).
Repairs to building. $99,590
Construction of bases for equipment to be installed later. 126,240
Driveways and Parking lots. 130,410
Remodeling of office space in building, including new
partitions and walls. 171,890
Special assessment by city on land. 18,330
3. On December 20, the company paid cash for equipment, $270,000, subject to a 2% cash discount, and freight on equipment of $10,800.
it is numbered to 3 with 12 blocks in all.
Pr..·ebes on th" books of ogbird Company for these transact ons (Round intern, ediate ca- eg.1.25124 and final answer to O decimal places e.g. 58,971 redit account titles are au amount is entered De not indent manually f no entry is req uired, select "No Entry" for ti ment the amounts No. Account Titles and Explanation Debit Credit 0 13Explanation / Answer
The cost of property = 12500 x 252 = 3150000
Total values allocated on the basis of appriasal
Land = 396000 / 2376000 x 3150000 = 525000
Building = 1188000 / 2376000 x 3150000 = 1575000
Equipment = 792000 / 2376000 x 3150000 = 1050000
The cost of property = 12500 x 252 = 3150000
No. Account Titles and Explanation Debit Credit 1 Building 15,75,000 Machinery and Equipment 10,50,000 Land 5,25,000 Share capital --ordinary 12,50,000 Share premium--ordinary 19,00,000 2 Building 1,80,390 Machinery and Equipment 1,26,240 Land Improvement 1,30,410 Land 18,330 Cash 4,55,370 3 Machinery and Equipment 2,80,800 Cash 2,80,800