5. Pensacola Inc. exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance.

	Old Equipment								Cash
	Book Value				Fair Value				Received
Equipment A	$	74,000			$	81,300			$	11,300
Equipment B	$	61,600			$	54,800			$	10,300

For Equipment B, Pensacola would record a gain/(loss) of:

MULTIPLE CHOICE

a. $5,300

b. $(6,800)

c. $(7,800)

d. none of these answer choices are correct

6. On January 1, 2018, Laramie Inc. acquired land for $6.2 million. Laramie paid $1.2 in cash and signed a 6% note requiring the company to pay the remaining $5 million plus interest on December 31, 2019. An interest rate of 6% properly reflects the time value of money for this type of loan agreement. For what amount should Laramie record the purchase of land?

MULTIPLE CHOICE

a, $6.8 million

b. $5.0 million

c. $5.6 million

d. $6.2 million

8. Savings Mart is a national retail chain. To entice the company to open a mega store in its jurisdiction, the city of Populationville donated a 20-acre tract of land to be used for construction. The land was originally purchased by the city for $250,000 three years ago. The appraisal value at the time of the donation was $300,000. For what amount should Savings Mart record the donated land?

MULTIPLE CHOICE

a. $250,000

b. $275,000

c. $300,000

d. $0; donated assets are not recorded

14. Intangible assets that have an indefinite useful life:

MULTIPLE CHOICE

a. Are those with no foreseeable limit on the period of time over which the asset is expected to contribute to the cash flows of the entity.

b. Are those with no legal, contractual, or economic factors that are expected to limit their useful life to a company.

c. Are those whos acquisition costs is not amortized over their useful life

d. all of these answer choices are correct

15. Sox Corporation purchased a 40% interest in Hack Corporation for $2,000,000 on January 1, 2018. On November 1, 2018, Hack declared and paid $3.0 million in dividends. On December 31, Hack reported a net loss of $5.6 million for the year. What amount of loss should Sox report on its income statement for 2018 relative to its investment in Hack?

MULTIPLE CHOICE

a. $1,200,000

b. $800,000

c. $2,000,000

d. $2,240,000