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Smith Company exchanges assets to acquire a building. The market price of the Smith stock...

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Accounting

Smith Company exchanges assets to acquire a building. The market price of the Smith stock on the exchange date was $40 per share and the building's book value on the books of the seller was $225,000.
Which of the following is correct for Smith Company when Smith issues 10,000 shares of $10 par value common stock and pays $22,500 cash in exchange for the building?
Multiple Choice
Stockholders' equity increases $377,500.
Total assets increase $377,500.
Stockholders' equity increases $225,000.
Total assets increase $400,000.

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