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. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 3. Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 4. Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? No Gain or Loss on exchange of assets Initial value of new land Required 3 Required 4
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. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 3. Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 4. Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? No Gain or Loss on exchange of assets Initial value of new land Required 3 Required 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $14,000 (original
cost of $32,000 less accumulated depreciation of $18,000) and a fair value of $9,400. Kapono paid $24,000 cash to
complete the exchange. The exchange has commercial substance.
Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had book value of
$520,000 and a fair value of $740,000. Kapono paid $54,000 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. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would
recognize on the exchange? What is the initial value of the new land?
3. Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss
that Kapono would recognize on the exchange? What is the initial value of the new land?
4. Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the
farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange?
What is the initial value of the new land?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2 Required 3
Required
Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the
farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the
exchange? What is the initial value of the new land?
No Gain or Loss on exchange of
assets
Initial value of new land
Show Transcribed Text
Just need requirement 4.
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