Assume that a start-up manufacturing company receives land in exchange for 10,000 shares of $1 par common stock when the common stock is trading in the market at $15 per share. The land has no readily determinable market value. The impact on the financial statements is.

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02-11-2022
Business

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Assume that a start-up manufacturing company receives land in exchange for 10,000 shares of $1 par common stock when the common stock is trading in the market at $15 per share. The land has no readily determinable market value. The impact on the financial statements is.

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shomerajeshwari90 shomerajeshwari90 · Answer 1 · 2022-11-13T05:07:37-05:00

Since shares in Startup Manufacturing have a documented market value but land does not, the difference in value will be reported as a gain in the financial statement.

Par value per share = $1

No. of shares = 10,000

Market value of each share = $10

Total value of shares = $10,000

Market value of shares = $100,000

Financial statements are written records of a person, company, or other entity's financial situation and actions. An incredibly simple format is used to provide pertinent financial data in a systematic manner. Financial statement is used by investors and analysts to assess a firm's productivity and forecast in which the stock price would go in the future. The annual survey, which includes the company's financial statements, is among the most significant sources of trustworthy and audited financial information.

Investors, market researchers, and lenders assess a company's financial statement and profits potential using its accounting information.

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