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ch 10 homework solutions

# ch 10 homework solutions - EXERCISE 10-1(15 20 minutes...

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EXERCISE 10-1 (15--20 minutes) Item Land Land Improvements Building Other Accounts (a) (\$275,000) Notes Payable (b) \$275,000 (c) \$ 8,000 (d) 7,000 (e) 6,000 (f) (1,000) (g) 22,000 (h) 250,000 (i) 9,000 (j) \$ 4,000 (k) 11,000 (l) (5,000) (m) 13,000 (n) 19,000 (o) 14,000 (p) 3,000

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EXERCISE 10-7 (15 -- 20 minutes) (a) Land ...................................................................... 81,000 Contribution Revenue ................................ 81,000 (b) Land ...................................................................... 180,000 Buildings .............................................................. 630,000 Common Stock (\$50 X 13,000) ................... 650,000 *Paid-in Capital in Excess of Par ............... 160,000 *Since the market value of the stock is not determinable, the market value of the property is used as the basis for recording the asset and issuance of the stock. (c) Machinery ............................................................. 40,100 Materials ...................................................... 12,500 Direct Labor ................................................. 15,000 Factory Overhead [(60% X \$15,000) + \$2,700 + \$900] ........... 12,600 (Overhead applied, 60% of \$15,000 plus \$3,600) Note to instructors : Students may need a little help in working this exercise; they will need to draw on their managerial accounting course.
EXERCISE 10-8 (20--25 minutes) 1. Land ...................................................................... 350,000 Building ................................................................ 1,050,000 Machinery and Equipment .................................. 700,000 Common Stock (12,500 X \$100) ................. 1,250,000 Paid-in Capital in Excess of Par ................. 850,000 (\$2,100,000 -- \$1,250,000) (The cost of the plant assets is \$2,100,000, or 12,500 X \$168. The cost is allocated in proportion to the appraised value: 1/6 to Land, 1/2 to Building, and 1/3 to Machinery and Equipment.) 2.

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