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QUESTION 28 Townsend traded a building for a similar building. Townsend also paid $5,800 as part...

QUESTION 28

  1. Townsend traded a building for a similar building. Townsend also paid $5,800 as part of the transaction. The book value of the building was $89,800, while its fair value was $101,300. The trade lacks commercial substance.

    Townsend would record the new building and a gain/(loss) of:

    Building Gain/(loss)
    a. $ 107,100 $ 0
    b. $ 107,100 $ 11,500
    c. $ 95,600 $ 0
    d. $ 95,600 $ 11,500
    A.

    Option C.
    B.

    Option A.
    C.

    Option B.
    D.

    Option D.
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