Following is activity related to Overland Company:
1. Land was given to the company by the State of Florida to use as a manufacturing facility site. The market value of the land at the time of the donation was $102,000.
2. Addition land and buildings were acquired in exchange for 15,000 shares of company stock. The property including land and buildings was appraised at $1,090,000. The appraisal applied $200,000 to the land and the remainder to the buildings. The stock is not publicly traded but sales in the prior year were for $75 per share and $68 per share.
3. An entry is needed to record materials, labor and overhead that are allocable to machinery constructed. These costs have been charged to the materials, labor and overhead manufacturing accounts.
Materials used $10,900
Factory supplies used 1,000
Direct labor used 12,100
Overhead that exceeded normal levels caused by construction 3,000
Fixed overhead rate applied to regular manufacturing operations
60% of direct labor costs
Cost to purchase this machinery from outside suppliers 35,000
Prepare journal entries for Overland Company to record the above transactions