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Kansas Company acquired a building valued at $165,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $18 per share. At what amount should the building be recorded by Kansas Company?

Respuesta :

Answer:

$216,000

Explanation:

Given:

Value of the building = $165,000

Stocks exchanged = 12,000 shares

Selling price of the share = $18 per share

Now,

The amount that should be recorded by Kansas Company will be fair market price of the share

Therefore,

The amount building should be recorded

= Stocks exchanged × Selling price of the share

= 12,000 × $18

= $216,000

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