Land appraised at $80,000 is purchased by issuing 1,000 shares of $20 par value common stock. The market price of the shares at the time of the exchange, based on active trading in the securities market, is $95 per share. Should the land be recorded at $20,000, $80,000, or $95,000? Explain.
Answer to relevant QuestionsMeng, Inc. purchases 1,000 shares of its own previously issued $5 par common stock for $12,000. Assuming the shares are held in the treasury, what effect does this transaction have on? (a) Net income, (b) Total assets, (c) ...At December 31, Ortiz Corporation reports net income of $480,000. Prepare the entry to close net income.Beauty Island Corporation began operations on April 1 by issuing 60,000 shares of $5 par value common stock for cash at $13 per share. On April 19, it issued 2,000 shares of common stock to attorneys in settlement of their ...As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different clients.1. LR Corporation is a closely held corporation whose stock is not publicly traded. On December 5, ...The ledger of Rolling Hills Corporation contains the following accounts: Common Stock, Preferred Stock, Treasury Stock, Paid-in Capital in Excess of Par—Preferred Stock, Paid-in Capital in Excess of Stated Value—Common ...
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