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Aleks [24]
3 years ago
9

On December 1, Miser Corporation exchanged 6,000 shares of its $25 par value common stock held in treasury for a parcel of land

to be held for a future plant site. The treasury shares were acquired by Miser at a cost of $40 per share, and on the exchange date the common share of Miser had a fair value of $50 per share. Miser received $18,000 for selling scrap when an existing building on the property was removed from the site. Based on these facts, the land should be capitalized at what amount?
Business
1 answer:
Bond [772]3 years ago
4 0

Answer:

Capitalized value $582.000.

Explanation:

Step 1. Given information.

  • The common share of Miser had a fair value of $50 per share.

Step 2. Formulas needed to solve the exercise.

  • Fair value of shares = Price per share * (Amount by selling scrap -        exchanged shares)
  • Capitalized value = fair value of shares - value of scrap.

Step 3. Calculation.

Fair value of shares = $50 * (18.000 - 6.000) = $600.000

<em />

<em>Land should be capitalized by fair market value of share exchanged less any recovery of scrap as land will be developed for future plant.  </em>

Step 4. Solution.

<em />

Fair value of shares = $50*12.000 = $600.000  

Less: value of scrap = $18.000  .

Capitalized value = $600.000   - $18.000 = $582.000.

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Account Title Amount Account Title Amt Accounts Payable ---------------------- $ 204,975 Income Taxes Payable --------------- 78
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Answer:

          Stockholders Equity

Preferred Stock                375,000

Common Stock                562,500

Additional Paid-in Capital   81,900

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Total Equity                    1,325,4‬00

Explanation:

We look into the list only for the equity accounts:

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We will also include the retained earnings account

All this accounts increase the equity, so we ujust need to add them together.

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A factory machine was purchased for $393000 on January 1, 2018. It was estimated that it would have a $74000 salvage value at th
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Answer:

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To calculate the depreciation expense using the units of activity method, we need to use the following formula on each year:

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