MCQ Clifton Industries acquired a warehouse valued at$200,000 for property tax purposes in exchange for15,000 shares of its $5 par common stock. The stockis widely traded and sells for $16 per share. At whatamount should the warehouse be recorded by CliftonIndustries?a. $75,000b. $240,000c. $200,000d. $160,000

Explanation of Exchange of Property for Stock:When a company acquires an asset in exchange for its…

Answered: Clifton Industries acquired a warehouse…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 11MCQ

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Clifton Industries acquired a warehouse valued at $200,000 for property tax purposes in exchange for 15,000 shares of its $5 par common stock. The stock is widely traded and sells for $16 per share. At what amount should the warehouse be recorded by Clifton Industries? a. $75,000 b. $240,000 c. $200,000 d. $160,000
Kansas 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 $15 per share. At what amount should the building be recorded by Kansas Company?a. $60,000b. $180,000c. $210,000d. $120,000
Kansas Company acquired a building valued at $158,000 for property tax purposes in exchange for 12,000 shares of its $3 par common stock. The stock is widely traded and selling for $19 per share. At what amount should the building be recorded by Kansas Company? a. $228,000 b. $36,000 OC. $158,000 Od. $191,500
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Financial Accounting
This year, Sigma Inc. generated $662,250 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Sale Price O$ 75,000 41,750 Acc. Basis Depr.* $ 149,600 $ 103,600 Marketable securities Production equipment Business realty: Land Building 82,880 237,000 270,000 247,250 210,500 81,000 *Through date of sale. Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.
Fairbanks Corporation purchased 400 ordinary shares of Sherman Inc. as a trading investment for E13,200. During the year, Sherman paid a cash dividend of £3.25 per share. At year-end, Sherman shares were selling for £34.50 per share. How much total revenues (all revenues) should be recognized from this investment during the year? Select one: Oa. $1900 Ob. $700 OC $1300 Od. $600
Assume the following independent cases:A. At the beginning of the year, a check was issued for P400,000 as payment for a piece of land, and the buyer assumed the liability for the unpaid taxes at the end of the year, P10,000 and those assessed for the current year at P9,000.B. A company issued 14,000 ordinary shares (P10 par) with a market value of P60 per share (based upon a recent sale of 100 shares) for the land. The land was recently appraised at P800,000 by independent and competent appraisers.C. A company rejected an offer to purchase the land for P8,000,000 cash two years ago. Instead, the company issued 100,000 ordinary shares for the land (market value of the ordinary share, P78 each based on several recent large transactions and normal weekly stock trading volume).D. A company purchased land by signing a note with the seller, requiring P100,000 down payment, payment of P120,000 one year from purchase, and P80,000 three years from purchase. The note is non-interest bearing,…
At a total cost of $1,251,600, Herrera Corporation acquired 84,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 300,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. a. Journalize the entries by Herrera Corporation to record the following information: If an amount box does not require an entry, leave it blank. Question Content Area 1. Tran Corp. reports net income of $2,250,000 for the current period. blank - Select - - Select - - Select - - Select - Question Content Area 2. A cash dividend of $1.60 per common share is paid by Tran Corp. during the current period. blank - Select - - Select - - Select - - Select - Question Content Area b. Why is the equity method appropriate for the Tran Corp. investment? An investment amount of the outstanding common stock of the investee is presumed to represent significant influence. The equity method is…
On June 30, 2024, Ericson, Inc. purchased land. In payment for the land, Erickson, Inc. issued 10,000 shares of common stock with a $10 par value. The land had been appraised at a market value of $117,000. The journal entry to record this transaction would be: O Land 100,000 Common Stock-$10 Par Value O Land Common Stock-$10 Par Value Paid-In Capital in Excess of Par-Common O Land Common Stock-$10 Par Value Paid-In Capital in Excess of Par-Common Land Common Stock-$10 Par Value 117,000 137,000 117,000 100,000 100,000 17,000 100.000 37,000 117,000
This year, Sigma Inc. generated $636,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis Acc. Depr.* Sale Price Marketable securities $ 157,600 $0 $ 74,000 Production equipment 115,600 92,480 36,000 Business realty: Land 235,500 0 241,750 Building 263,000 78,900 218,000 *Through date of sale. Required: Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. Recompute taxable income assuming that Sigma sold the securities for $174,000 rather than $74,000. Note: I have part B correct with $705,430. It's part A I am having trouble with
During 20X1, Craig Company had the following transactions: a. Purchased 300,000 of 10-year bonds issued by Makenzie Inc. b. Acquired land valued at 105,000 in exchange for machinery. c. Sold equipment with original cost of 810,000 for 495,000; accumulated depreciation taken on the equipment to the point of sale was 270,000. d. Purchased new machinery for 180,000. e. Purchased common stock in Lemmons Company for 82,500. Required: 1. Prepare the net cash from investing activities section of the statement of cash flows. 2. CONCEPTUAL CONNECTION Usually, the net cash from investing activities is negative. How can Craig cover this negative cash flow? What other information would you like to have to make this decision?

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