Red Inc Issues Shares of Stock with a Par Amount of of $1

question 144

Multiple Choice

Red Inc. issues shares of stock with a par amount of $1 per share in exchange for a machine. In accounting for the transaction:

• A) If fair values of the stock and machine are unavailable, the stock should be recorded at its par amount.
• B) The stock is recorded at its par amount unless the fair value of the machine is readily available.
• C) Both the stock and machine are recorded at the fair value of the stock or the fair value of the machine, whichever is more clearly determinable.
• D) The machine should not be depreciated because the stock has no term to maturity.

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Definitions:

Nickel and Dimed

A book by Barbara Ehrenreich that explores the impact of low-wage jobs on workers and highlights issues of poverty and social inequality.

Independent Sector

A term often used to refer to the non-profit sector, encompassing organizations and entities that operate independently of government influence.

Third Sector

The part of an economy comprising non-profit organizations and other non-governmental organizations, including charities, voluntary and community groups.

Alienated

Feeling isolated and separated from oneself or society, often in the context of work or social relationships.