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Tatiana [17]
3 years ago
5

Two independent companies, Hager Co. and Shaw Co., are in the home building business. Each owns a tract of land held for develop

ment, 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 $384,000 $240,000 Fair value based upon appraisal 480,000 420,000 The exchange was made, and based on the difference in appraised fair values, Shaw paid $60,000 to Hager. The exchange lacked commercial substance. For financial reporting purposes, Hager should recognize a pre-tax gain on this exchange of
Business
1 answer:
zepelin [54]3 years ago
5 0

Answer:

Hager should recognize a pre-tax gain on this exchange of $12,000

Explanation:

In order to calculate the pre-tax gain on this exchange that should be recognized, we would have to calculate first the total gain as follows:

Total Gain=$480,000-$384,000

Total Gain=$96,000

Because the exchange lacks commercial substance and some cash was received a portion of gain is recognized=$60,000/$480,000=0.125

Therefore, amount of pre-tax gain=$96,000*0.125=$12,000

Hager should recognize a pre-tax gain on this exchange of $12,000

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Explanation:

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List essential preparations when communicating to inform, to persuade, and<br>to argue​
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<u>Explanation:</u>

Some of the essential preparations when communicating to inform, persuade, and argue includes;

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3 years ago
Jill Scott is an accountant with Cameron and Associates, a law firm in downtown Seattle. The firm maintains a checking account w
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Answer:

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Entrepreneurs who have the ability to effectively confront demands or stressors, and thus improve entrepreneurial performance, t
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Answer:

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