! Required Information Base Inc. (Base) and Space Ltd. (Space) formed a joint venture, Moon Ltd., on January 1, 2023. Base invested plant and equipment with a book value of $300,000 and a fair value of $900,000 for a 30% Interest in the joint venture. Base's plant and equipment were estimated to provide an additional 5 years of utility to Moon. Space contributed assets with a fair value of $2,100,000 for its 70% stake in Moon. Moon reported a net Income of $2,800,000 for 2023. The transactions set out above were considered to have commercial substance. What would be the recognizable gain on January 1, 2023 arising from Base's Investment in Moon? Multiple Choice $180,000 $294.000 $420,000
! Required Information Base Inc. (Base) and Space Ltd. (Space) formed a joint venture, Moon Ltd., on January 1, 2023. Base invested plant and equipment with a book value of $300,000 and a fair value of $900,000 for a 30% Interest in the joint venture. Base's plant and equipment were estimated to provide an additional 5 years of utility to Moon. Space contributed assets with a fair value of $2,100,000 for its 70% stake in Moon. Moon reported a net Income of $2,800,000 for 2023. The transactions set out above were considered to have commercial substance. What would be the recognizable gain on January 1, 2023 arising from Base's Investment in Moon? Multiple Choice $180,000 $294.000 $420,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Required Information
Base Inc. (Base) and Space Ltd. (Space) formed a joint venture, Moon Ltd., on January 1, 2023.
Base invested plant and equipment with a book value of $300,000 and a fair value of $900,000 for a
30% Interest in the joint venture. Base's plant and equipment were estimated to provide an additional
5 years of utility to Moon.
Space contributed assets with a fair value of $2,100,000 for its 70% stake in Moon.
Moon reported a net Income of $2,800,000 for 2023.
The transactions set out above were considered to have commercial substance.
What would be the recognizable gain on January 1, 2023 arising from Base's Investment in Moon?
Multiple Choice
$180,000
$294.000
$420,000
Nil
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