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Allen Inc. exchanged land and cash of $4,500 for similar land. The book value and the fair value of the old land were $89,900 and

Allen Inc. exchanged land and cash of $4,500 for similar land. The book value and the fair value of the old land were $89,900 and $100,100, respectively. Assuming that the exchange lacks commercial substance, Allen would record equipmentnew and a gain/(loss) on exchange of assets in the amounts of:

Land Gain/(loss)
a. $ 104,600 $ 0
b. $ 104,600 $ 10,200
c. $ 94,400 $ 0
d. $ 94,400 $ 10,200

Multiple Choice

  • Option A

  • Option D

  • Option C

  • Option B

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