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9 June, 17:10

Kansas Company acquired a building valued at $151,000 for property tax purposes in exchange for 12,000 shares of its $3 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

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  1. 9 June, 18:22
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    The building would be recorded by Kansas Company for an amount of $216,000

    Explanation:

    In order to calculate the amount should the building be recorded by Kansas Company we would have to calculate the value of the building with the following formula:

    value of the building = shares exchanged*Market value per share

    shares exchanged=12,000 shares

    Market value per share=$18

    Therefore, value of the building=12,000*$18

    value of the building=$216,000

    The building would be recorded by Kansas Company for an amount of $216,000
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