Use the Following Information for Questions
Two Independent Companies

question 24

Multiple Choice

Use the following information for questions
Two independent companies, Mintz Co.and Pine Co., are in the home building business.Each owns a tract of land held for development, 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: $$\begin{array} { l r r } & \text { Mintz's Land } & \text { Pine's Land } \\\text { Cost and book value } & \$ 192,000 & { \$ 120,000 }\\\text { Fair value based upon appraisal } & 240,000 & 210,000\end{array}$$ The exchange was made, and based on the difference in appraised fair values, Pine paid $30,000 to Mintz.The exchange lacked commercial substance.
-For financial reporting purposes, Mintz should recognize a pre-tax gain on this exchange of

• A)$0.
• B)$6,000.
• C)$30,000.
• D)$48,000.

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Definitions:

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The act of placing money into a banking institution for safekeeping, which can also refer to the money that has been deposited.

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The act of recording or entering new sums of money placed into a banking account.

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