On June 30, 2015, Cey, Inc. exchanged 6,000 shares of Seely Corp. $30 par value common stock for a patent owned by Gore Co. The Seely stock was acquired in 2015 at a cost of $165,000. At the exchange date, Seely common stock had a fair value of $46 per share, and the patent had a net carrying value of $330,000 on Gore's books. Cey should record the patent at

Question

Quizplus · Accepted Answer

The fair value of the Seely Corp. stock is $46 per share and Cey exchanged 6,000 shares, therefore the total fair value of the stock is $276,000 (6,000 x $46). This is the amount that Cey should recognize as the cost of the patent. The net carrying value of the patent on Gore Co.'s books is irrelevant in determining the cost of the patent to Cey. Therefore, the answer is C) $276,000.