Case A Kapono Farms exchanged an old tractor for a newer model The old tractor had a book value of $20,000 (original cost of $80,000 less accumulated depreciation of $60,000) and a fair value of $10,000 Kapono paid $30,000 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 tractor Repeat requirement I assuming that the fair value of the old tractor is $40,000 instead of $10,000 Case B Kapono Farms exchanged 100 acres of farmland for similar land The farmland given had a book value of $200,000 and a fair value of $300,000 Kapono paid $500,000 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 Repeat requirement 1 assuming that the fair value of the farmland given is $100,000 instead of $300,000 Repeat requirement 1 assuming that the exchange lacked commercial substance Case A Kapono Farms exchanged an old tractor for a newer model The old tractor had a book value of $20,000 (original cost of $80,000 less accumulated depreciation of $60,000 ) and a fair value of $10,000 Kapono paid $30,000 cash to complete the exchange The exchange has commercial substance Required 1 What is the amount of gain or loss that Kapono would recognize on the exchange What is the initial value of the new tractor 2 Repeat requirement 1 assuming that the fair value of the old tractor is $40,000 instead of $10,000 Case B Kapono Farms exchanged 100 acres of farmland for similar land The farmland given had a book value of $200,000 and a fair value of $300,000 Kapono paid $500,000 cash to complete the exchange The exchange has commercial substance Required 1 What is the amount of gain or loss that Kapono would recognize on the exchange What is the initial value of the new land 2 Repeat requirement 1 assuming that the fair value of the farmland given is $100,000 instead of $300,000 3 Repeat requirement 1 assuming that the exchange lacked commercial substance

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 09, 2024

Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $20,000 (original cost of $80,000

Required:

What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor?
Repeat requirement I assuming that the fair value of the old tractor is $40,000 instead of $10,000.

Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $200,000 and a fair value of $300,000.

Kapono paid $500,000 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?
Repeat requirement 1 assuming that the fair value of the farmland given is
$100,000 instead of $300,000.
Repeat requirement 1 assuming that the exchange lacked commercial substance.

Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $20,000 (original cost of $80,000 less accumulated depreciation of $60,000 ) and a fair value of $10,000. Kapono paid $30,000 cash to complete the exchange. The exchange has commercial substance. Required: 1. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor? 2. Repeat requirement 1 assuming that the fair value of the old tractor is $40,000 instead of $10,000. Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $200,000 and a fair value of $300,000. Kapono paid $500,000 cash to complete the exchange. The exchange has commercial substance. Required: 1. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 2. Repeat requirement 1 assuming that the fair value of the farmland given is $100,000 instead of $300,000. 3. Repeat requirement 1 assuming that the exchange lacked commercial substance