On October 1,Azuma,Inc

question 32

Multiple Choice

On October 1,Azuma,Inc.exchanged 8,000 shares of its $25 par value common stock for a parcel of land to be held for a future plant site.Azuma's common stock had a fair market value of $80 per share on the exchange date.Azuma received $36,000 from the sale of scrap when an existing building on the site was razed.The land should be carried at

• A) $200,000.
• B) $236,000.
• C) $604,000.
• D) $640,000.

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Definitions:

Subsidiary Company

A company that is controlled by another, larger corporation, known as the parent company or holding company.

Gross Margin

A financial metric indicating the difference between revenue and the cost of goods sold, divided by revenue, expressed as a percentage, showing the efficiency of a company in managing its production and distribution costs.

Cost Of Sales

The direct costs attributable to the production of the goods sold by a company.

Separated-Entity Income Statements

Financial documents that detail the revenues, expenses, and net income of an entity as distinct from its owners or affiliated entities.