Merritt Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $18 per share. At what amount should the building be recorded by Merritt Company?
A) $60,000
B) $216,000
C) $210,000
D) $156,000

Question

Quizplus · Accepted Answer

The building should be recorded at the fair market value of the stock exchanged, which is 12,000 shares x $18 per share = $216,000.

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