which ofthe following is correct for Smith Company when Smith issues 10 000 shar
ID: 2556277 • Letter: W
Question
which ofthe following is correct for Smith Company when Smith issues 10 000 shares of $10 par value common stock and pays?29,000 cash in exchange for the building? Smith Company exchanges assets to acquire a building. The market price of the Smith stock on the exchange date was $27 per share and the building's book value on the books of the seller was $290,000. O Total assets increase $270.000. O Stockholders' equity increases $290.000. O Stockholders' equity increases$241,000. Total assets increase $241,000.Explanation / Answer
Answer is Total assets increase $241000
Explanation;
Market price of shares = $27
Number of shares = 10000
(10000 * $27) = $270000
Total assets increase ($270000 – $29000) = $241000
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