Question

On July 6, Larkspur Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is: Land $500,000 Buildings 1,500,000 Equipment 1,000,000 Total $3,000,000 Larkspur Company gave 12,400 shares of its $100 par value common stock in exchange. The stock had a market price of $168 per share on the date of the purchase of the property. 2. Larkspur 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 $147,000 Construction of bases for equipment to be installed later 189,000 Driveways and parking lots 170,800 Remodeling of office space in building, including new partitions and walls 225,400 Special assessment by city on land 25,200 3. On December 20, the company paid cash for equipment, $364,000, subject to a 2% cash discount, and freight on equipment of $14,700. Prepare entries on the books of Larkspur 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.)

Answer 1

Page. No O Answer Journal entries on the book, Di91 Company w AAAAA Land = $500,000 Building - $ 1500,000 Equipment = $1000,000 Total = 500,000 + 1500,000 + 1000,000 = $3000.000 Comenon stock = 12400 shares x $100 par . = $1040,000 Paid in capital in excess of pari - common stock - 12400 shares x ($168 - 4100) = 12400 x 68 = $843200 Total amount paid = 1240,000 + 843200 = $ 2083200

Land value assigned Page. No @ = 500,000 x 52083200 3000,000 = $347200 Building value assigned = 1500,000 x $ 2083200 3000/000 $1041600 = Value assigned to equipment 1000000 x4 2 0 83260 3000,000 = $694400 ☺ Building cosf = $147000 + $205400 = $372400 @ Equipment conf = $14.700 + (364000 X (100%.- 37.)) = 14900 + ( 364000 x 987.) = 14700 + 356720 = $371420

Page No ③ Debit Gredit DOCETE $ $1041600 Particular Land Building Equipment Common stock Paid i capital in excess $ 694400 $1240,000 $843200 of far- common stock Building $372400 $ 189000 $170800 Equipment Land improvements hand Cash 26200 - $757400 Equipment $371420 cash 371420