Exercise 10-12 Below are transactions related to Novak Company. (a) The City of Pebble Beach gives the company 5 acres of land as a plant site. The fair value of this land is determined to be $84,030. (b) 13,000 shares of common stock with a par value of $51 per share are issued in exchange for land and buildings. The property has been appraised at a fair value of $840,300, of which $163,750 has been allocated to land and $676,550 to buildings. The stock of Novak Company is not listed on any exchange, but a block of 100 shares was sold by a stockholder 12 months ago at $66 per share, and a block of 200 shares was sold by another stockholder 18 months ago at $59 per share. (c) No entry has been made to remove from the accounts for Materials, Direct Labor, and Overhead the amounts properly chargeable to plant asset accounts for machinery constructed during the year. The following information is given relative to costs of the machinery constructed. Materials used Factory supplies used Direct labor incurred Additional overhead (over regular) caused by construction of machinery, excluding factory supplies used $13,470 812 14,890 2,846 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 39,770 Prepare journal entries on the books of Novak Company to record these transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit (a) Click if you would like to Show Work for this question: Open Show Work Exercise 10-24 On December 31, 2017, Carla Inc. has a machine with a book value of $1,410,000. The original cost and related accumulated depreciation at this date are as follows. Machine Less: Accumulated depreciation Book value $1,950,000 540,000 $1,410,000 Depreciation is computed at $90,000 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal. A fire completely destroys the machine on August 31, 2018. An insurance settlement of $645,000 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit August 31, 2018 (To record current depreciation.) August 31, 2018 (To record loss of the machine.) SHOW LIST OF ACCOUNTS LINK TO TEXT On April 1, 2018, Carla sold the machine for $1,560,000 to Dwight Yoakam Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit April 1, 2018 (To record current depreciation.) April 1, 2018 (To record sale of the machine.) SHOW LIST OF ACCOUNTS LINK TO TEXT On July 31, 2018, the company donated this machine to the Mountain King City Council. The fair value of the machine at the time of the donation was estimated to be $1,650,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Debit Credit Date Account Titles and Explanation July 31, 2018 (To record current depreciation.) July 31, 2018 (To record donation of the machine.) Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT