S Corporation Offered to Issue 5,000 Shares of Its No

question 108

Multiple Choice

S Corporation offered to issue 5,000 shares of its no par value common shares to another company in exchange for a building at a time when there were 1,000,000 shares already outstanding and were selling for $4.00 per share at the time. The owner of the building had the opportunity to sell it to a competing buyer for $26,000. However, because the seller wanted the S Corporation shares, S's offer was accepted. At what amount should the building be reported in S's financial statements?

• A) $26,000
• B) $10,000
• C) $20,000
• D) $16,000

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Definitions:

One-One Principle

A fundamental principle of counting that states each object being counted must be assigned one, and only one, number to represent it.

Gelman

A cognitive psychologist known for her work on the development of categorization and reasoning in children, especially in understanding numbers and biology.

Count Words

The process or activity of determining the number of words in a text or document.

Order-Relevant Principle

involves the idea that the sequence or arrangement of elements or events can significantly affect understanding, memory, or perception.