Bro exchanged a delivery truck costing P1,000,000 for a parcel of land. The truck had a carrying amount of P650,000 and a fair value P500,000. The entity gave P600,000 in cash in addition to the truck as part of this transaction. It is expected that the cash flows from the assets will be significantly different. The previous owner of the land had listed the land for sale at P1,200,000. At what amount should Bronze record the land? a. 1,100,000 b. 1,250,000 C. 1,150,000 d. 1,200,000

Bro exchanged a delivery truck costing P1,000,000 for a parcel of land. The truck had a carrying amount of P650,000 and a fair value P500,000. The entity gave P600,000 in cash in addition to the truck as part of this transaction. It is expected that the cash flows from the assets will be significantly different. The previous owner of the land had listed the land for sale at P1,200,000. At what amount should Bronze record the land? a. 1,100,000 b. 1,250,000 C. 1,150,000 d. 1,200,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Horton Stores exchanged land and cash of $5,000 for similar land. The book value and the fair value of the land were $90,000 and $100,000, respectively. Assuming that the exchange has commercial substance, Horton would record land—new and a gain/(loss) on exchange of assets in the amounts of: Land Gain/(loss) a. $ 105,000 $ 0 b. $ 105,000 $ 10,000 c. $ 95,000 $ 0 d. $ 95,000 $ 10,000 Multiple Choice Option A Option B Option C Option D
OCD exchanged old realty for new like-kind realty. OCD’s adjusted basis in the old realty was $31,700 ($60,000 initial cost − $28,300 accumulated depreciation), and its FMV was $48,000. Because the new realty was worth only $45,000, OCD received $3,000 cash in addition to the new realty. Required: a-1. Compute OCD's realized gain. a-2. Determine the amount and character of any recognized gain. b. Compute OCD’s basis in its new realty.
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'he Bronco Corporation exchanged land for equipment. The land had a book value of $122,000 and a fair alue of $154,000. Bronco paid the owner of the equipment $12,000 to complete the exchange which has ommercial substance. Show the entry with loss or gain on exchange
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