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Timmons Company traded machinery

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Timmons Company traded machinery Use the following information for questions 1 through 2. Two independent companies, Hager Co. and Shaw Co., are in the home building business. Each owns a tract of land held for development, but each would prefer to build on the other’s land. They agree to exchange their land. An appraiser was hired, and from her report and the companies’ records, the following information was obtained: Hager’s Land Shaw’s Land Cost and book value $192,000 $120,000 Fair value based upon appraisal 240,000 210,000 The exchange was made, and based on the difference in appraised fair values, Shaw paid $30,000 to Hager. The exchange lacked commercial substance. 1. For financial reporting purposes, Hager should recognize a pre-tax gain on this exchange of a. $0. b. $6,000. c. $30,000. d. $48,000. 2. The new land should be recorded on Hager’s books at a. $168,000. b. $192,000. c. $210,000. d. $240,000. 3. The new land should be recorded on Shaw’s books at a. $120,000. b. $150,000. c. $210,000. d. $240,000. 4. Timmons Company traded machinery with a book value of $120,000 and a fair value of $200,000. It received in exchange from Lewis Company a machine with a fair value of $180,000 and cash of $20,000. Lewis’s machine has a book value of $190,000. What amount of gain should Timmons recognize on the exchange? a. $ -0- b. $8,000 c. $20,000 d. $80,000 5. Lewis Company traded machinery with a book value of $190,000 and a fair value of $180,000. It received in exchange from Timmons Company a machine with a fair value of $200,000. Lewis also paid cash of $20,000 in the exchange. Timmons’s machine has a book value of $190,000. What amount of gain or loss should Lewis recognize on the exchange? a. $20,000 gain b. $ -0-. c. $1,000 loss d. $10,000 loss Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help

Timmons Company traded machinery

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