E10-12B (Entries for Asset Acquisition, Including Self-Construction) Below are transactions related to White Company.

E10-12B (Entries for Asset Acquisition, Including Self-Construction) Below are transactions related to White Company.

(a) The City of Grand Junction gives the company 5 acres of land as a plant site. The market value of this land is determined to be $173,000.

(b) 10,000 shares of common stock with a par value of $10 per share are issued in exchange for land and buildings. The property has been appraised at a fair market value of $500,000, of which $150,000 has been allocated to land and $350,000 to buildings. The stock of White Company is not listed on any exchange, but a block of 300 shares was sold by a stockholder 12 months ago at $78 per share, and a block of 400 shares was sold by another stockholder 18 months ago at $62 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                                                                                                 $18,000

Factory supplies used                                                                                       $1,250

Direct labor incurred                                                                                         $20,000

Additional overhead (over regular) caused by construction                              $3,000

of machinery, excluding factory supplies used

Fixed overhead rate applied to regular manufacturing operations        25% of direct labor cost

Cost of similar machinery if it had been purchased from

outside suppliers                                                                                              $83,000

Instructions

Prepare journal entries on the books of White Company to record these transactions.