A corporation acquired a copyright by issuing 1,000 shares of $5 par common stock. At the time of the exchange, the stock was selling for $40 per share. The copyright had a carrying value of $18,000 to the author. The purchasing corporation should assign to the copyright a value of
A) $18,000.
B) $5,000.
C) $32,000.
D) $40,000.

Question

Quizplus · Accepted Answer

The value assigned to the copyright should be based on the fair market value of the consideration given, which is 1,000 shares at $40 per share, totaling $40,000.

A Corporation Acquired a Copyright by Issuing 1,000 Shares of $5