Question

Kansas Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $15 per share. At what amount should the building be recorded by Kansas Company?

Answer 1

Answer:

Correct answer: $1,80,000.

Explanation:

The Building will be recorded at fair value of shares issued:

Value of building = 12,000 * 15

Value of building = $1,80,000

Thus, the amount at which the building be recorded by Kansas company is $1,80,000.