Company Corporate Inc. issued common stock in exchange for land with an original cost of $1,500,000. The directors of the corporation feel as though they got a great deal, as they feel the land is worth a lot of money due to the current real estate trend in the area. An independent appraise has valued the land at $2,000,000 which represents its fair value. Which is the correct value to be included in the books for the stock issued?
Company Corporate Inc. issued common stock in exchange for land with an original cost of $1,500,000. The directors of the corporation feel as though they got a great deal, as they feel the land is worth a lot of money due to the current real estate trend in the area. An independent appraise has valued the land at $2,000,000 which represents its fair value. Which is the correct value to be included in the books for the stock issued?
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 42P
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Transcribed Image Text:Company Corporate Inc. issued
common stock in exchange for land
with an original cost of $1,500,000.
The directors of the corporation feel
as though they got a great deal, as
they feel the land is worth a lot of
money due to the current real estate
trend in the area. An independent
appraise has valued the land at
$2,000,000 which represents its fair
value. Which is the correct value to
be included in the books for the
stock issued?
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