Amos Company acquired land in exchange for 10,000 shares ofits $10 par common st

Question

Amos Company acquired land in exchange for 10,000 shares ofits $10 par common stock. The fair market value of the land is notdeterminable, but the stock is widely traded and was selling for$25 per share when exchanged for the land. At what amount shouldthe land be recorded by Amos Company?
a. $150,000 b. $250,000 c. $350,000 d. $100,000 Amos Company acquired land in exchange for 10,000 shares ofits $10 par common stock. The fair market value of the land is notdeterminable, but the stock is widely traded and was selling for$25 per share when exchanged for the land. At what amount shouldthe land be recorded by Amos Company?
a. $150,000 b. $250,000 c. $350,000 d. $100,000

Explanation / Answer

B. $ 250,000 During exchange, asset is recorded at its fair market value. If FMVis not determinable, then it is recorded at the stock's marketvalue. ( 25 * 10,000 = 250,000)

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