A is corrent. The requirement is to determine the increase in additional paid-in capital resulting from a noncash stock transaction. Since the common stock is listed on the NYSE, its valuation appears to be more clearly determinable than the appraised valuation of the land. Therefore, the value of the common stock (1,000 shares x $21 = $21,000) should be used to measure the transaction. The increase in additional paid-in capital is $21,000 less $8,000 par value of stock, or $13,000. Note that if fair values of the stock and land are considered equally determinable, fair value of the stock is still used as the measurement basis because it is the consideration given in the transaction.
B is incorrect. Since the common stock is listed on the NYSE, its valuation appears to be more clearly determinable than the appraised valuation of the land. Therefore, the value of the common stock (1,000 shares x $21 = $21,000) should be used to measure the transaction. The increase in additional paid-in capital is $21,000 less $8,000 par value of stock, or $13,000. Note that if fair values of the stock and land are considered equally determinable, fair value of the stock is still used as the measurement basis because it is the consideration given in the transaction.
B is incorrect. Since the common stock is listed on the NYSE, its valuation appears to be more clearly determinable than the appraised valuation of the land. Therefore, the value of the common stock (1,000 shares x $21 = $21,000) should be used to measure the transaction. The increase in additional paid-in capital is $21,000 less $8,000 par value of stock, or $13,000. Note that if fair values of the stock and land are considered equally determinable, fair value of the stock is still used as the measurement basis because it is the consideration given in the transaction.
D is incorrect. Since the common stock is listed on the NYSE, its valuation appears to be more clearly determinable than the appraised valuation of the land. Therefore, the value of the common stock (1,000 shares x $21 = $21,000) should be used to measure the transaction. The increase in additional paid-in capital is $21,000 less $8,000 par value of stock, or $13,000. Note that if fair values of the stock and land are considered equally determinable, fair value of the stock is still used as the measurement basis because it is the consideration given in the transaction.
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