Question

which ofthe following is correct for Smith Company when Smith issues 10 000 shares of $10 par value common stock and pays?29,000 cash in exchange for the building? Smith Company exchanges assets to acquire a building. The market price of the Smith stock on the exchange date was $27 per share and the buildings book value on the books of the seller was $290,000. O Total assets increase $270.000. O Stockholders equity increases $290.000. O Stockholders equity increases$241,000. Total assets increase $241,000.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Answer is Total assets increase $241000

Explanation;

Market price of shares = $27

Number of shares = 10000

(10000 * $27) = $270000

Total assets increase ($270000 – $29000) = $241000

Add a comment
Know the answer?
Add Answer to:
which ofthe following is correct for Smith Company when Smith issues 10 000 shares of $10...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • When a company issues common stock for cash, what is the effect on the accounting equation...

    When a company issues common stock for cash, what is the effect on the accounting equation for the company? Select one: a. Assets increase and liabilities increase. O b. Liabilities decrease and stockholders' equity increases. O C. Assets increase and stockholders' equity increases. O d. Assets decrease and liabilities decrease. Jump to... • How Accounting Systems Work (B. il auto.proctoru.com is sharing your screen. Stop sharing Hide

  • PROBLEM VI The following information relates to Aires Corporation for 20x2 and 20x1 Aires Corporation Comparative Balance Sheets December 31, 20x2 and 20x1 s 21,00054, 000 ( 33,000) 421,000 480,00...

    PROBLEM VI The following information relates to Aires Corporation for 20x2 and 20x1 Aires Corporation Comparative Balance Sheets December 31, 20x2 and 20x1 s 21,00054, 000 ( 33,000) 421,000 480,000 (59,000) 310,000 340,000 (30,000) 17,000 15, 000 2,000 Assets Cash Accounts receivable (net) Inventory Prepaid expenses Investments Land Building (net) Equipment (net) Total assets 80,000 80,000 350,000 300,000 50,000 680,000 700,000 (20, 000) 520.000 340,000 180,000 $2,399,000 3,09,090,000 Liabilities $ 328,000 $ 335, 000 ( 7,000) Accounts payable Accrued liabilities...

  • 1. A company issues $20 million in new stock. The company later uses this money to...

    1. A company issues $20 million in new stock. The company later uses this money to acquire a building. What is the resulting effect of these transactions on the accounts? A. Cash increases, Building increases, and Contributed Capital increases. B. Cash decreases, Building increases, and Contributed Capital decreases. C. Building increases, and Contributed Capital increases. D. Building increases, and Contributed Capital decreases. 2. A Company has $15,000 of retained earnings, $26,000 of assets, and $6,000 of liabilities. How much is...

  • Given the accounting equation, answer each of the following questions. (a) The liabilities of Holland Company...

    Given the accounting equation, answer each of the following questions. (a) The liabilities of Holland Company are $122,500 and its stockholders' equity is $241,000. What is the amount of Holland Company's total assets? Holland Company's total assets (b) The total assets of Holland Company are $187,000 and its stockholders' equity is $93,000. What is the amount of its total liabilities? Holland Company's total liabilities (c) The total assets of Holland Company are $612,000 and its liabilities are equal to one-half...

  • 4. Glaser Company paid $36,000 to buy 3,000 shares of its $5 par value common stock...

    4. Glaser Company paid $36,000 to buy 3,000 shares of its $5 par value common stock for the treasury. The stock was originally sold for $27,000. The entry to record the purchase includes a a. debit to Treasury Stock for $27,000. b. credit to Treasury Stock for $15,000. c. debit to Treasury Stock for $36,000. d. credit to Common Stock for $27,000. 5. The purchase of treasury stock a. increases total assets and decreases total stockholders' equity. b. decreases total...

  • On January 2, 2018, Smith Company paid $252,000 to acquire 10,000 shares of Pets Corp. The...

    On January 2, 2018, Smith Company paid $252,000 to acquire 10,000 shares of Pets Corp. The investment represented 25% of the total shares outstanding of Pets Corp. and gave Smith Company the ability to exert significant influence upon the operations of Pets Corp. During the year ended December 31, 2018, Pets Corp. paid dividends of $1.75 per share (declared and paid on November 12, 2018) and reported income of $259,000. The market value of Pets Corp. stock at December 31,...

  • Problem 1 On Jan. 1 2018, Pan Corporation acquired 60% of the outstanding common stock of Smith Company for $104,600. F...

    Problem 1 On Jan. 1 2018, Pan Corporation acquired 60% of the outstanding common stock of Smith Company for $104,600. Fair Value of noncontrolling interest at the outstanding is $65,400. Smith is to continue its corporate existence as a subsidiary of Pan Company. Smith's stockholders' equity Jan 1, 2018, was as follows Common Stock-$20,000 Additional Paid in Capital- $30,000 Retained Earnings- $30,000 Total Stockholders' Equity- $80,000 At the time of the acquisition, all of Smith's assets and liabilities were reported...

  • QUESTION 2 if a company is considering the purchase of a parcel of land that was...

    QUESTION 2 if a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000, is offered for sale at $150.000, is assessed for tax purposes at 595.000, is recognized by the purchaser as easily being worth $140,000, and is purchased for $137.000, the land should be recorded in the purchaser's books at $140,000 5137,000 O $150,00 O 195.000 5138.500 QUESTION If a company purchases equipment costing 54,500 on credit, the effect on...

  • The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business...

    The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $48,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $17,400 cash. Apr. 10 Purchased $880 of supplies on account. July 1 Received $28,000 cash in advance for services to be provided over the next year. 20 Paid $660 of the accounts payable from April 10. Aug. 15 Billed a customer $9,300 for...

  • Exercise 2-8 Effective December 31, 2013, Zintel Corporation proposes to issue additional shares of its common...

    Exercise 2-8 Effective December 31, 2013, Zintel Corporation proposes to issue additional shares of its common stock in exchange for all the assets and liabilities of Smith Corporation and Platz Corporation, after which Smith and Platz will distribute the Zintel stock to their stockholders in complete liquidation and dissolution. Balance sheets of each of the corporations immediately prior to merger on December 31, 2013, follow. The common stock exchange ratio was negotiated to be 1:1 for both Smith and Platz....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT