Prater Incorporated enters into an exchange in which it gives up its warehouse on 10 acres of land and receives a tract of land. A summary of the exchange is as follows: Transferred FMV Original Basis Accumulated Depreciation Warehouse $ 452,500 $ 245,000 $ 45,500 Land 99,000 99,000 Mortgage on warehouse 48,750 Cash 20,500 20,500 Assets Received FMV Land $ 523,250 What are Prater's realized and recognized gain on the exchange and its basis in the assets it received in the exchange?
Prater Incorporated enters into an exchange in which it gives up its warehouse on 10 acres of land and receives a tract of land. A summary of the exchange is as follows: Transferred FMV Original Basis Accumulated Depreciation Warehouse $ 452,500 $ 245,000 $ 45,500 Land 99,000 99,000 Mortgage on warehouse 48,750 Cash 20,500 20,500 Assets Received FMV Land $ 523,250 What are Prater's realized and recognized gain on the exchange and its basis in the assets it received in the exchange?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Prater Incorporated enters into an exchange in which it gives up its warehouse on 10 acres of land and receives a tract of land. A summary of the exchange is as follows:
| Transferred | FMV | Original Basis | |
|---|---|---|---|
| Warehouse | $ 452,500 | $ 245,000 | $ 45,500 |
| Land | 99,000 | 99,000 | |
| Mortgage on warehouse | 48,750 | ||
| Cash | 20,500 | 20,500 |
| Assets Received | FMV |
|---|---|
| Land | $ 523,250 |
What are Prater's realized and recognized gain on the exchange and its basis in the assets it received in the exchange?
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