Business, 01.10.2019 04:00 xmanavongrove55

During its inception, devon company purchased land for $100,000 and a building for $180,000. after exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary, regan company, in exchange for 15,000 shares of regan's $10 par value stock. devon uses straight-line depreciation. useful life for the building is 30 years, with zero residual value. an appraisal revealed that the building has a fair value of $200,000.

1. based on the information provided, at the time of the transfer, regan company should record:

(1) building at $180,000 and no accumulated depreciation.

(2) building at $162,000 and no accumulated depreciation.

(3) building at $200,000 and accumulated depreciation of $24,000.

(4) building at $180,000 and accumulated depreciation of $18,000.

2. based on the information provided, what amount would be reported by devon company as investment in regan company common stock?

(1) $312,000

(2) $180,000

(3) $330,000

(4) $150,000

3. based on the preceding information, regan company will report

(1) additional paid-in capital of $0.

(2) additional paid-in capital of $150,000.

(3) additional paid-in capital of $162,000.

(4) additional paid-in capital of $180,000.

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During its inception, devon company purchased land for $100,000 and a building for $180,000. after e...

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