Question

Below are transactions related to Bridgeport Company. (a) The City of Pebble Beach gives the company 5 acres of land as a plant site. The fair value of this land is determined to be $77,400. (b) 13,000 shares of common stock with a par value of $51 per share are issued in exchange for land and buildings. The property has been appraised at a fair value of $774,000, of which $192,100 has been allocated to land and $581,900 to buildings. The stock of Bridgeport Company is not listed on any exchange, but a block of 100 shares was sold by a stockholder 12 months ago at $66 per share, and a block of 200 shares was sold by another stockholder 18 months ago at $59 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 $11,850 Factory supplies used 944 Direct labor incurred 16,040 Additional overhead (over regular) caused by construction of machinery, excluding factory supplies used 2,680 Fixed overhead rate applied to regular manufacturing operations 60% of direct labor cost Cost of similar machinery if it had been purchased from outside suppliers 47,320

Prepare journal entries on the books of Bridgeport Company to record these transactions. (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.)

Answer 1

Transaction	Account Titles and Explanations	Debit (in $)	Credit (in $)
a.	Land	$77,400
	Contribution Revenue		$77,400
	(To record the Contribution revenue of Land)
b.	Land	$192,100
	Buildings	$581,900
	Common Stock                 ( 13,000 shares x $51)		$663,000
	Additional Paid-in Capital - Bal. Fig		$111,000
	(To record the exchange with Common Stock)
c.	Machinery - (Bal. Fig.)	$41,138
	Materials		$11,850
	Direct Labor		$16,040
	Factory Overhead                            [ (60% x $16,040) + $2,680 + $944)		$13,248
	((To record the cost of the machinary)