3. Sally Jones acquired 5,000 shares of $5par value stock in exchange for land valuedby an appraiser at $50,000. Her brother,John Jones, bought a large number ofsame company's shares on the same dayfor $9 cash per share. Which of thefollowing should be used to record thevalue of the land on the company's books?a. the $5 par value of the stock (a totalvalue of $25,000 for the shares Sallyreceived: $5 par value per share x 5,000shares). b. the $9 per share cash value ofthe shares, as established by John'stransaction (a total value of $45,000 forthe shares Sally received: $9 per share x5,000 shares). c. a price determined bythe company's chief accounting officer d.the $50,000 appraised value of the land.

Common stock represents ownership in a company and thus, the owner of the common stock is able to…

Answered: 3. Sally Jones acquired 5,000 shares of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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3. Sally Jones acquired 5,000 shares of $5 par value stock in exchange for land valued by an appraiser at $50,000. Her brother, John Jones, bought a large number of same company's shares on the same day