Question
Two construction companies, Harglo and Kalman, are in the construction business. Each owns a tract of land being held for development, but each company would
Two construction companies, Harglo and Kalman, are in the construction business. Each owns a tract of land being held for development, but each company would prefer to build on the other's land. Accordingly, they agree to exchange their land, and have the following information:
|
| Harglo's Land | Kalman's Land |
| Cost and book value | $150,000 | $100,000 |
| Fair value based upon appraisal | $200,000 | $160,000 |
The exchange of land was made, and, based on the difference in appraised fair value, Kalman paid $40,000 cash to Harglo.
23. For financial reporting purposes, Harglo would recognize a gain on this exchange in the amount of
| a. | $0 |
| b. | $6,000 |
| c. | $10,000 |
| d. | $40,000 |
24. For financial reporting purposes, Kalman would recognize a gain on this exchange in the amount of
| a. | $0 |
| b. | $20,000 |
| c. | $30,000 |
| d. | $60,000 |
25. After the exchange, Harglo would record its newly acquired land on its books at
| a. | $120,000 |
| b. | $102,000 |
| c. | $136,000 |
| d. | $166,000 |
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Artificial Intelligence In Accounting And Auditing Knowledge Representation Accounting Applications And The Future Volume 3
Authors: Miklos A. Vasarhelyi
1st Edition
1558760784, 978-1558760783
