Respuesta :
Answer and Explanation:
As question is completed, please find the information below:
The following information is given relative to costs of the machinery constructed. $11,680 936 Materials used Factory supplies used Direct labor incurred Additional overhead (over regular) caused by construction of machinery, excluding factory supplies used 17,160 2,882 60% of direct labor cost Fixed overhead rate applied to regular manufacturing operations Cost of similar machinery if it had been purchased from outside suppliers 41,130. Prepare journal entries on the books of Whispering Company to record these transactions.
The journal entries are shown below
a) Land Dr $88,510
To grand revenue $88,510
(Being the fair value of the land is recorded)
b) Building Dr $721,460
Land Dr $163,460
To Common stock $676,000 ( 13,000 × $52)
To Additional paid in capital in excess of par $209,100
(Being the common stock is exchanged with the building and land)
c) Machinery Dr $42,954
To Direct labor $17,160
To Factory overhead A/c $14,114
To Materials A/c $11,680
(Being the overhead is recorded)
Because fair value of stock is not definable, so the fair value of property is used as base value to issue the shares.
The computation of the factory overhead is shown below:
Fixed overhead applied $10,296 ($17,160 × 60%)
Add: Additional overhead $2,882
Add: Factory supply $936
Total $14,114
