On December 1, Miser Corporation exchanged 4,000 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 shares of Miser had a fair value of $50 per share. Miser received $12,000 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

Question

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The land should be capitalized at the fair value of the stock given up, which is 4,000 shares at $50 per share, totaling $200,000. The $12,000 received for the scrap reduces the amount capitalized, so the land is capitalized at $200,000 - $12,000 = $188,000.

On December 1, Miser Corporation Exchanged 4,000 Shares of Its