How much is gain on exchange recognized by resilient co

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Reference no: EM132817632

Fact pattern RESILIENT ELASTIC Co. acquired land with fair value of ?4,000,000 by issuing 10,000 shares with par value of ?40 per share and quoted price of ?360 per share.

Problem 1: How much is the initial cost of the equipment received by RESILIENT Co.?

a. 400,000

b. 4,000,000

c. 3,600,000

d. 180,000

Problem 2: How much is gain (loss) on exchange recognized by RESILIENT Co.?

a. 3,200,000

b. 400,000

c. (400,000)

d. 0

Problem 3: Use the fact pattern above except that the fair value of the land is indeterminable. How much is the initial cost of the equipment received by RESILIENT Co.?

a. 400,000

b. 4,000,000

c. 3,600,000

d. 180,000

Problem 4: How much is gain (loss) on exchange recognized by RESILIENT Co.?

a. 3,200,000

b. 400,000

c. (400,000)

d. 0

Reference no: EM132817632

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