Prepare entries on the books of headland company

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Reference no: EM131699767

Exercise - Presented below is information related to Headland Company.

1. On July 6, Headland Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is:

Land

$396,000

Buildings

1,188,000

Equipment

792,000

   Total

$2,376,000

Headland Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $252 per share on the date of the purchase of the property.

2. Headland 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

$99,590

Construction of bases for equipment to be installed later

126,240

Driveways and parking lots

130,410

Remodeling of office space in building, including new partitions and walls

171,890

Special assessment by city on land

18,330

3. On December 20, the company paid cash for equipment, $270,400, subject to a 2% cash discount, and freight on equipment of $10,800.

Prepare entries on the books of Headland Company for these transactions.

Reference no: EM131699767

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