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Jamison Company purchased the assets of Booker Company at an auction for $1,400,000.An independent appraisal of the fair value of the assets is listed below:
-On December 1, Miser Corporation exchanged 2,000 shares of its $25 par value ordinary shares 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 ordinary shares of Miser had a fair value of $50 per share.Miser received $6,000 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

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Jamison Company purchased the assets of Booker Company at an auction for $1,400,000.An independent appraisal of the fair value of the assets is listed below: 
-On December 1, Miser Corporation exchanged 2,000 shares of its $25 par value ordinary shares 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 ordinary shares of Miser had a fair value of $50 per share.Miser received $6,000 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

Quizplus · Accepted Answer

To capitalize the land, we need to determine the cost of the land. In this case, the cost of the land is the fair value of the shares given up by Miser Corporation. Therefore, the cost of the land is calculated as follows:
2,000 shares x $50 per share = $100,000
Additionally, the $6,000 received for selling scrap should be deducted from the cost of the land. Therefore, the capitalized cost of the land is:
$100,000 - $6,000 = $94,000. Therefore, the correct choice is C.

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