On December 1,2014,Gomer Corporation exchanged 5,000 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 Gomer at a cost of $40 per share.Gomer's common stock had a fair market value of $50 per share on December 1,2014.Gomer received $10,000 for scrap when an existing structure was removed from the site.
Required:
1.Determine the appropriate cost of the land acquired.
2.Provide general guidelines for determining the amount to be recorded as the historical cost for assets acquired by the issuance of securities.

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The Answer of On December 1,2014,Gomer Corporation exchanged 5,000 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 Gomer at a cost of $40 per share.Gomer's common stock had a fair market value of $50 per share on December 1,2014.Gomer received $10,000 for scrap when an existing structure was removed from the site.
Required:
1.Determine the appropriate cost of the land acquired.
2.Provide general guidelines for determining the amount to be recorded as the historical cost for assets acquired by the issuance of securities.

On December 1,2014,Gomer Corporation Exchanged 5,000 Shares of Its $25