Consider each situation for Kathy, Inc. below independently.
?
·
Kathy, Inc. issued 10,000 shares of its $25 par common stock (current fair value of common is $35 per share) for a large tract of land. The land was appraised at $400,000. Kathy already had 500,000 shares of common stock outstanding.
·
Kathy, Inc. issued 2,000 shares of $10 par Class A common stock at $12 and 100 shares of no-par Class B common stock at $20.
Required:
a.At what amount should land be recorded?b.What is the total amount that should be recorded for additional paid-in capital from the second situation?
What will be an ideal response?
| a. | $350,000 (10,000 × $35) |
| b. | $4,000 (2,000 × $2) |
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