Question

Tom Yuppy, a wealthy investor, exchanged a plot of land that originally cost him $60,720 for 1,380 shares of $10 par common stock issued to him by Leuig Corp. On the same date, Leuig Corp. issued an additional 2,760 shares of stock to Yuppy for $44 per share. Required a. What was the value of the land at the date of the stock issue?

Answer 1

Answer:

$13,800

Explanation:

Given that,

Cost of land = $60,720

Number of shares issued = 1,380

Par value of common stock = $10

The market value of the land is determined by multiplying the number of shares issued with the par value of common stock.

Value of the land at the date of the stock issue:

= Number of shares issued × Par value of common stock

= 1,380 shares × $10

= $13,800