Oxono Company Realized a $74,900 Gain on the Exchange of One

question 85

Multiple Choice

Oxono Company realized a $74,900 gain on the exchange of one asset for another asset (no cash was included in the exchange) . The assets were like-kind properties. Oxono reported the gain as revenue on its financial statements. Which of the following is true?

• A) The exchange resulted in a favorable temporary book/tax difference.
• B) The exchange resulted in a favorable permanent book/tax difference.
• C) The exchange resulted in an unfavorable temporary book/tax difference.
• D) The exchange resulted in an unfavorable permanent book/tax difference.