Quality Cleaning Corp. issued 50 no-par-value common shares for land with a market value of $4,000. Dillon had originally issued common shares at $100 two years ago, but there is currently no market value available for their shares. The amount of contributed capital arising from this transaction is:
A) $4,000.
B) $600.
C) $1,000.
D) $100.
E) $6,000.

Question

Quizplus · Accepted Answer

The contributed capital is based on the fair market value of the land received, which is $4,000, as there is no current market value for the shares.