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.

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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

See similar textbooks

Related questions

Q: The company's charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: Prepare entries to record the transactions for Maine Corp.: (a) Issued 2,000 shares of $10 par…

A: Journal entry refers to recording/classifying business transactions into books of accounts…

Q: The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Value of land = $1,200,000

Q: The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: A company acquires land by issuing 11,100 shares of its $20 par value common stock which is…

A: Consideration given up = 11,100 shares x $30 = $333,000

Q: The company's charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: The Sneed Corporation issues 10,000 shares of $50 par preferred stock for cash at $75 per share.…

A: Paid in capital in excess of par = (Issue price per share - Face value per share) x No. of shares =…

Q: Sudoku Company issues 25,000 shares of $7 par value common stock in exchange for land and a…

A: Lets understand the basics. Journal entry is required to make to record event and transaction that…

Q: On April 5, Fenning Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for…

A: Common stock: These are the ordinary shares that a corporation issues to the investors in order to…

Q: On April 5, Fenning Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for…

A: The company can raise funds in different modes like, by issuing common stock, by issuing preferred…

Q: (a) Prepare the journal entry for the issuance assuming the par value of the common stock was $5 and…

Q: The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Journal entries refers to the systematic documentation of the financial transactions of the company…

Q: Sudoku Company issues 17,000 shares of $7 par value common stock in exchange for land and a…

A: A journal entry is a core and foremost record that a transaction has taken place in the business.…

Q: 400,000 Purchase of land by issuing bonds 250,000…

A: Operating activities refer to those business activities that are involved in the daily basis…

Q: On April 2, 20x5, Jedi Nights, Inc., a hotel under the management of Skywalker Enterprises purchased…

A: Treasury stock means the stock in which the company purchases its own stock from the market. The…

Q: The company's charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Journal- The first stage of the accounting process is journalizing. Journal is the primary book of…

Q: A company issued 14,000 ordinary shares ( $50 par) with a market value of $60 per share (based on a…

A: An appraised value is a professional assess of the condition and worth of a apiece of property at a…

Q: A company was organized on January 1, 2020. It is authorized to issue 216,000 shares of 5%, $10 par…

A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…

Q: The company's charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Journal entries:

Q: Sudoku Company issues 22,000 shares of $9 par value common stock in exchange for land and a…

A: Face value of common stock issue = No. of common stock issued x Par value per share = 22,000 share x…

Q: The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: Farmers Incorporated issued 6,000 shares of its $10 par value common stock in exchange for land that…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: Casper Energy Exploration reports that the corporation's assets are valued at $120,000,000, its…

A: solution given Total assets 120000000 Total liabilities 76000000 Number of shares…

Q: The company's chater authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: Mulatto Company’s Stockholders equity section of the balance sheet at December 31, 2020

A: Dividend paid Preference stock(5000 shares* Par value $100 per share @5%) = 500000*5% = $25000…

Q: On October 17, 2021, LILAC Corporation exchanged 20,000 shares of its ₱200 par value stock for land.…

A: The shares are exchanged for their appraised value.

Q: The company's chater authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: A & B :

Q: BC Co. provided the following information on selected transactions during 2021: Proceeds from…

A: Cash flow from investing activities: It is a section of the cash flow statement that shows the cash…

Q: On February 12, Quality Carpet Inc., a carpet wholesaler, issued for cash 1,000,000 shares of no-par…

A: a.

Q: Journalize this transaction

A: When common stock is issued in exchange of asset, journal entry will comprise of the following…

Q: Sudoku Company issues 21,000 shares of $7 par value common stock in exchange for land and a…

A: Paid in capital in excess of par = Land + Building - Par value of shares issued =…

Q: Sudoku Company issues 21,000 shares of $7 par value common stock in exchange for land and a…

A: Introduction: Sometimes businesses trades common stock for land, building or any other assets. By…

Q: BC Co. provided the following information on selected transactions during 2021: Proceeds from…

A: Financing activities: It considers the impact of any change in Capital structure of the entity and…

Q: A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a…

A: A journal is a part of the books of accounts, which is used to record all the transactions of the…

Q: Sudoku Company issues 25,000 shares of $7 par value common stock in exchange for land and a…

A: Journal Entries in the Books Of Sudoku Company as under.

Q: Sudoku Company issues 7,000 shares of $7 par value common stock in exchange for land and a building.…

A: Paid in capital in excess of Par value, Common Stock = Land + Building - Par value of Common stock =…

Q: sume the following independent cases: A. At the beginning of the year, a check was issued for…

A: Answer AMOUNT CASE A The cost of Land will be Cheque issued…

Q: he company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Owner's Equity common and preference shares issued and the reserve and surplus of the company. In…

Q: Smith Company exchanges assets to acquire a building. The market price of the Smith stock on the…

A: Total cost of building to be recorded = (11,100*$20) + $21,100 Total cost of building to be recorded…

Q: on may 15, the simple corporation issued 6,000 common shares of $8 par value stock for land valued…

A: Hi student Since no requirement is mentioned, it is assumed that it is to be identified that whether…

Q: A Company had the following activities during the current period: Acquired investment in ordinary…

A: Cash flows from investing activities are those activities which are related with purchase and sale…

Q: The Business charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred…

A: Stocks: Stocks are shares in ownership of the companies. It represents the capital raised by a…

Q: Present entries to record the following: Issued 1,000 shares of $15 par common stock at $52 for…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: Sudoku Company issues 26,000 shares of $7 par value common stock in exchange for land and a…

A: The company issues the common stock for raising the funds for the business. The issue will be done…

Q: On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a…

A: Organizations that desire to conserve money or have limited cash on hand can enter into exchange…

Q: A piece of equipment is acquired by an entity by issuing 10,000 shares of P10 par ordinary shares.…

A: Cost of the equipment will be total market price of share issued

Q: Sudoku Company issues 19,000 shares of $6 par value common stock in exchange for land and a…

A: If value of land and building value is greater than the par value of common stock then the excess…

Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

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.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Land appraised at $65,600 is purchased by issuing 820 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 $16,400, $65,600, or $77,900? The land should be recorded at $ K
Bridgeport Inc.’s $9 par value common stock is actively traded at a market price of $15 per share. Bridgeport issues 4,800 shares to purchase land advertised for sale at $71,500.Journalize the issuance of the stock in acquiring the land. What is the date? What is credit or debit? What is the title or explanation?
Farmers Incorporated issued 6,000 shares of its $10 par value common stock in exchange for land that has a market value of $84,000. The entry to record this transaction would include: A debit to Common Stock for $60,000 B. A debit to Land for $60,000 A credit to Land for $60,000
Loretta Inc. issues 2,000 shares of preferred stock in exchange for land and building that have a fair value of $50,000 and $80,000 respectively. What is included in the journal entry to record this transaction? a. A debit to Land and Building for $130,000 b. A debit to Land for $80,000 c. A credit to Preferred Stock for $130,000 d. A credit to Preferred Stock for $2,000
Salem Corporation issued 2,000 shares of 5 par value stock for land. The land was advertised for sale at 10,500. At the time of the exchange, there is no established market price for the stock. The :land should be recorded at 20,000.a O 10,500.b O 5,000 .c O 15,000.d O
Question 2: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. Shouldthe land be recorded at $20,000, $80,000, or $95,000? Explain.
Riverbed Inc's $10 par value common stock is actively traded at a market price of $16 per share. Riverbed issues 6,000 shares to purchase land advertised for sale at $77,500. Journalize the issuance of the stock in acquiring the land. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a market value of $84,000. The entry to record this transaction would include: Multiple Choice A debit to Common Stock for $12,000. A debit to Land for $12,000. A credit to Land for $12,000. A credit to Paid-in Capital in Excess of Par Value, Common Stock for $72,000. A credit to Common Stock for $84,000.
Sudoku Company issues 7,000 shares of $7 par value common stock in exchange for land and a building. The land is valued at $45,000 and the building at $85,000. Prepare the journal entry to record issuance of the stock in exchange for the land and building.
On October 1, 2018, Branded Corporation exchanged 20,000 shares of its P 200 par value of Ordinary Shares for land. A few months ago, the land was appraised by Mr. Roy, an independent appraiser, at P 5,000,000. Branded shares are currently traded at the stock exchange at P 300. How much should be debited to land account?
Culver Inc.’s $10 par value common stock is actively traded at a market price of $16 per share. Culver issues 6,000 shares to purchase land advertised for sale at $108,000. Journalize the issuance of the stock in acquiring the land.
A piece of equipment is acquired by an entity by issuing 10,000 shares of 10 par ordinary shares. The equipment has a list price of 150,000 and a trade discount of 10%. If paid in cash at the time of purchase, a 5% cash discount is allowed. The company’s ordinary shares are actively traded in a capital market with an average market price of 13 at the date of the exchange. What is the cost of the equipment? A. 130,000 B. 128,250 C. 150,000 D. 135,000