Fairchild Company acquired a building valued at $210,000 for property tax purposes in exchange for 6,000 shares of its $10 par common stock.The stock is widely traded and selling for $31 per share.At what amount should the building be recorded by Fairchild Company?

Question

Quizplus · Accepted Answer

The building should be recorded at its fair market value, which in this case is the value of the 6,000 shares of common stock exchanged for it. Therefore, the building should be recorded at 6,000 shares × $31 per share = $186,000.

Fairchild Company Acquired a Building Valued at $210,000 for Property