Liberia Corporation exchanged 2,000 shares of its common stock for a parcel of land to be held as a future plant site.The book value of the shares is currently $90 per share, and their current market value is $110 per share.Liberia received $30,000 from the sale of 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 $190,000, which is the sum of the book value of the shares ($180,000) and the proceeds from the sale of scrap ($10,000).

Liberia Corporation Exchanged 2,000 Shares of Its Common Stock for a Parcel