A plant facility consisting of land and building was acquired from Mana\'s compa

Question

A plant facility consisting of land and building was acquired from Mana's company in exchange for 20,000 shares of Hasbro's common stock. On aquisition date Hasbro's stock had a closing market price of $37 per share. The plant facility was carried on Mana's books at $110,000 for land and $320,000 for the building on exchange date. Current appraised values are $230,000 for the land and $690,000 for the building.
Prepare a detailed analysis on the balance sheet for this exchange. Do I need to look at the book value for this, or is that irrelavent information?

Explanation / Answer

He got the stock worth $740000 Current appriase value = 920000 His book value = 430000 The book value is irrelevant, however, His market value of books has reduced, as the market value has been reduced as he has exchanged 920000 worth of land and builidng against 740000 of stocks So he is worsen off

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