On December 1,2014,Gomer Corporation Exchanged 5,000 Shares of Its $25

Essay

On December 1,2014,Gomer Corporation exchanged 5,000 shares of its $25 par value common stock held in treasury for a parcel of land to be held for a future plant site.The treasury shares were acquired by Gomer at a cost of $40 per share.Gomer's common stock had a fair market value of $50 per share on December 1,2014.Gomer received $10,000 for scrap when an existing structure was removed from the site.
Required:
1.Determine the appropriate cost of the land acquired.
2.Provide general guidelines for determining the amount to be recorded as the historical cost for assets acquired by the issuance of securities.