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    clara52565's Avatar
    clara52565 Posts: 1, Reputation: 1
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    Apr 27, 2010, 08:40 PM
    During its inception, Devon Company purchased land for $100,000 and a building for $1
    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.
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    Clough Posts: 26,677, Reputation: 1649
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    Apr 27, 2010, 09:50 PM
    Quote Originally Posted by clara52565 View Post
    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.
    Hi, clara52565!

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