On May 5, 2020, Samson Corp. exchanged 4,000 of its common shares for a copyright owned by Ingleton Ltd. At this date, Samson's common shares were quoted at $ 22 per share, and the copyright had a carrying value of $ 100,000 on Ingleton's books. Samson should record the copyright at
A) $ 122,000.
B) $ 104,000.
C) $ 100,000.
D) $ 88,000.

Question

Quizplus · Accepted Answer

In accounting for non-monetary exchanges, the asset acquired should be recorded at the fair value of the asset given up. In this case, Samson Corp. exchanged 4,000 shares valued at $22 each. Therefore, the copyright should be recorded at 4,000 shares * $22/share = $88,000.