Question

Tom Yuppy, a wealthy investor, exchanged a plot of land that originally cost him $60,720 for 1,380 shares of $10 par common stock issued to him by Leuig Corp. On the same date, Leuig Corp. issued an additional 2,760 shares of stock to Yuppy for $44 per share. Required a. What was the value of the land at the date of the stock issue?

Answer 1

The value of the land at the date of the stock issue was $135,240.

Step-by-step explanation:

To determine the value of the land at the date of the stock issue, we need to calculate the value of the stock that Tom Yuppy received in exchange. Initially, Tom exchanged the land for 1,380 shares of $10 par common stock issued by Leuig Corp. Therefore, the value of the land at that time would be the market value of 1,380 shares of stock.

Next, on the same date, Leuig Corp. issued an additional 2,760 shares of stock to Yuppy for $44 per share. To calculate the value of the land at the date of the stock issue, we need to consider the total value of the stock received by Yuppy.

Therefore, the total value of the stock received by Yuppy can be calculated as follows:

(1,380 shares × $10) + (2,760 shares × $44)

= $13,800 + $121,440

= $135,240

Therefore, the value of the land at the date of the stock issue was $135,240.

Answer 2

$13,800

Step-by-step explanation:

Given that,

Cost of land = $60,720

Number of shares issued = 1,380

Par value of common stock = $10

The market value of the land is determined by multiplying the number of shares issued with the par value of common stock.

Value of the land at the date of the stock issue:

= Number of shares issued × Par value of common stock

= 1,380 shares × $10

= $13,800