On September 1, 2013, SI exchanged 2,000 shares of its common shares for a parcel of land to be held for a future plant site. SI's common shares had a fair market value of $80 per share on September 1, 2013. (Based on several recent large trading volumes.) SI received netted $9,000 from the demolition of an existing building on the site. The book value of the land acquired is:

Question

Quizplus · Accepted Answer

The book value of the land acquired is equal to the fair market value of the stock exchanged ($80 per share) multiplied by the number of shares exchanged (2,000 shares), minus the net cash received from the demolition ($9,000).

Book value = (2,000 shares x $80/share) - $9,000 
Book value = $160,000 - $9,000 
Book value = $151,000

Therefore, the correct answer is choice C.

On September 1, 2013, SI Exchanged 2,000 Shares of Its