Lester Company transferred the following assets to a newly created subsidiary, Mumby Corporation, in exchange for 40,000 shares of its $3 par value
Lester Company transferred the following assets to a newly created subsidiary, Mumby Corporation, in exchange for 40,000 shares of its $3 par value stock:
| Cost | Book Value | |||||
| Cash | $ | 40,000 | $ | 40,000 | ||
| Accounts Receivable | 75,000 | 68,000 | ||||
| Inventory | 50,000 | 50,000 | ||||
| Land | 35,000 | 35,000 | ||||
| Buildings | 160,000 | 125,000 | ||||
| Equipment | 240,000 | 180,000 |
The following are the answers for Depreciation – how did they come up with those answers, if the questions doesn’t give you more details?
| Accumulated depreciation–Buildings | 35,000 |
| Accumulated depreciation–Equipment | 60,000 |
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