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Lump-Sum Purchases; Issuance of Stock for Plant Assets 10.32 A package consisting of building and land is bought at a lump-sum price of $70,000. The FMV of the building and land is $60,000 and $20,000, respectively. Allocate the cost to each item and prepare a jour- nal entry.

Lump-Sum Purchases; Issuance of Stock for Plant Assets 10.32 A package consisting of building and land is bought at a lump-sum price of $70,000. The FMV of the building and land is $60,000 and $20,000, respectively. Allocate the cost to each item and prepare a jour- nal entry.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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10.32 and 10.33 please. 

Buildings 10.31 Company X constructs its own building and incurs the following costs: bricks, $40,000; construction labor, $70,000; heat and power, $20,000; fixed overhead, $4,000. (a) Determine the cost of this building. (b) Would your answer to part (a) change if an outside construction company charged $127,000? Why? Lump-Sum Purchases; Issuance of Stock for Plant Assets 10.32 A package consisting of building and land is bought at a lump-sum price of $70,000. The FMV of the building and land is $60,000 and $20,000, respectively. Allocate the cost to each item and prepare a jour- nal entry. 10.33 Company Fissues 80 shares of its $80-par common stock for a machine. Prepare a journal entry for each of the following independent cases: (a) The FMV of the machine is $14,000. (b) The FMV of the stock is $12,000.
Transcribed Image Text:Buildings 10.31 Company X constructs its own building and incurs the following costs: bricks, $40,000; construction labor, $70,000; heat and power, $20,000; fixed overhead, $4,000. (a) Determine the cost of this building. (b) Would your answer to part (a) change if an outside construction company charged $127,000? Why? Lump-Sum Purchases; Issuance of Stock for Plant Assets 10.32 A package consisting of building and land is bought at a lump-sum price of $70,000. The FMV of the building and land is $60,000 and $20,000, respectively. Allocate the cost to each item and prepare a jour- nal entry. 10.33 Company Fissues 80 shares of its $80-par common stock for a machine. Prepare a journal entry for each of the following independent cases: (a) The FMV of the machine is $14,000. (b) The FMV of the stock is $12,000.
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