1. Bogus Co. exchanged Building 42 which has an appraised value of $4,800,000, a

Question

1. Bogus Co. exchanged Building 42 which has an appraised value of $4,800,000, a cost of $7,590,000, and accumulated depreciation of $3,600,000 for Building X belonging to Good Co. Building X has an appraised value of $4,512,000, a cost of $9,030,000, and accumulated depreciation of $4,752,000. The correct amount of cash was also paid. Assume depreciation has already been updated. How much gain or loss did Good record, assuming no commercial substance?

0 gain/loss

234,000 gain

48,600 gain

None of the above

Explanation / Answer

234,000 gain Statement showing computations Particulars Amount Cost              9,030,000.00 Accumulated Depr              4,752,000.00 Book Value = 9,030,000 - 4,752,000              4,278,000.00 Fair Value              4,512,000.00 Gain = 4,512,000 - 4,278,000                 234,000.00

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