Answer:
amount of gain recognize is $24000
Explanation:
Given data
Timmons book value = $360,000
Timmons fair value = $600,000
Lewis fair value = $540,000
Lewis book value = $570,000
cash = $60,000
to find out
amount of gain recognize
solution
we know that here that cash is receive in exchange
so no commercial substance but gain is recognize
so we find gain that is
gain = fair value - book value
gain = 600000 - 360000
so gain is $240000
and
we say cash % for fair value is
cash % for fair value = cash / fair value
cash % = 60000 / 600000
cash% is 10% for fair value
so that here recognized gain recognize is given as
gain recognize = gain × cash %
gain recognize = 240000 × 10%
gain recognize = 24000
so amount of gain recognize is $24000
