Liberia Corporation exchanged 2,000 shares of its common shares 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

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The land should be initially capitalized (recorded on the company's balance sheet as an asset) at its fair market value. In this case, the fair market value is the value of the 2,000 shares of Liberia Corporation's common shares given in exchange for the land, which is 2,000 shares x $110 per share = $220,000.

However, the company also received $30,000 from the sale of scrap when an existing building on the property was removed from the site. This amount should be deducted from the initial capitalized cost of the land.

Therefore, the land should be capitalized at $220,000 - $30,000 = $190,000 (Choice C).

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