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lorasvet [3.4K]
3 years ago
10

JOHNSON HAS THE FOLLOWING DATA REGARDING AN EXCHANGE OF LAND: (ASSUME THE EXCHANGES LACKS COMMERCIAL SUBSTANCE) OLD LAND FMV 580

,000 OLD LAND COST 430,000 NEW LAND FMV 493,000 CASH RECEIVED 87,000 REQUIRED: HOW MUCH GAIN WILL JOHNSON RECOGNIZE ON THE EXCHANGE
Business
1 answer:
Sav [38]3 years ago
4 0

Answer: No gain or loss will be recognized since the exchange lacks commercial substance.

Explanation:

Based on the information given, the amount of gain that John will recognize on the exchange will be nothing.

In this case, we are given the information that the exchange lacks commercial substance. Commercial substance refers to the transaction which brings about the change in the cash flow of the entity.

In this case, since there isn't ant commercial substance involved, then there will be no gain or loss recognized.

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According to the law of demand, what is the relationship between price and quantity demanded?
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Answer:

According to the law of demand, there is a negative or an inverse relationship between the price of the good and the quantity demanded of that good. This means that an increase in the price of a commodity will lead to decrease the quantity demanded for this commodity and a fall in the price of a commodity will lead to an increase in the quantity demanded for this commodity.

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I hope the answer has served you!

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5 0
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What is the chronological order of the material cost flows through the subsidiary records? a. Materials Ledger Card, Receiving R
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