Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Question
Chapter 11, Problem 11.8MC
To determine
To identify: The correct option.
Given Information:
Fair value of land is $450,000.
Sales value of plot is $350,000.
Sales value of the land purchased is $500,000.
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Students have asked these similar questions
Misha Corp. exchanged Land A for
Land B. Misha originally purchased
Land A for $150,000 and Land A's fair
value was $165,000 at the time of the
exchange. Misha gave Land A and
$12,000 in cash in exchange for Land
B, which had a fair market value of
$177,000 at the time of the exchange.
Assume the exchange qualifies as a
like-kind exchange.
1. What is Misha's recognized gain/loss
on the exchange?
A. $12000 gain B. $0 gain C. $27000
D. $15000
2. What is Misha's basis in Land B?
A. $150000 B. $177000 C. $162000
Jersey Inc. and Texas Co. have an exchange with no commercial substance. The asset given up by Jersey Inc. has a book value of $160,000 and a fair value of $200,000. The asset given up by Texas Co. has a book value of $260,000 and a fair value of $280,000. Boot of $80,000 is received by Texas Co. What amount should Jersey Inc. record for the asset received?
Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $520,000 and a fair value of $740,000. Kapono paid $54,000 cash to complete the exchange. The exchange has commercial substance.
Required:
What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land?
Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land?
Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land?
Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that…
Chapter 11 Solutions
Intermediate Accounting
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