Question
During its inception, Devon Company purchased land for $100,000 and a building for $180,000. After exactly 3 years, it transferred these assets and cash of
During its inception, Devon Company purchased land for $100,000 and a building for $180,000. After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary, Regan Company, in exchange for 15,000 shares of Regan's $10 par value stock. Devon uses straight-line depreciation. Useful life for the building is 30 years, with zero residual value. An appraisal revealed that the building has a fair value of $200,000.
Based on the information provided, what amount would be reported by Devon Company as investment in Regan Company common stock?
Multiple Choice
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$312,000
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$180,000
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$330,000
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$150,000
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Managerial Accounting Principles Of Accounting II
Authors: Eric W. Noreen, Peter C. Brewer, Ray H. Garrison
6th Edition
0077681258, 978-0077681258
