Shea Corporaton has an asset which is required to be shown at fair value on the balance sheet. Shea Corporation has immediate access to two different active markets as of the balance sheet date. In the Urban Market , the price for the asset is $26, sales commissions are $3, and the costs to transport the asset to the Urban market are $4. In the Rural Market , the price for the asset is $25, sales commissions are $1, and the costs to transport the asset to the Rural market are $2. Additional information is as follows: Market Entity Specific Volume Market Volume Urban 75% 20% Rural 25% 80% Which market should Shea use ? Based upon the market you selected what is the fair value for the asset?
Question 7 options:
Shea Corporaton has an asset which is required to be shown at fair value on the
In the Urban Market , the price for the asset is $26, sales commissions are $3, and the costs to transport the asset to the Urban market are $4.
In the Rural Market , the price for the asset is $25, sales commissions are $1, and the costs to transport the asset to the Rural market are $2. Additional information is as follows:
|
Market |
Entity Specific Volume |
Market Volume |
| Urban |
75% |
20% |
|
Rural |
25% |
80% |
Which market should Shea use ?
Based upon the market you selected what is the fair value for the asset?
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