The Following Information Pertains to Questions

question 75

Multiple Choice

The following information pertains to questions
John Inc and Victor Inc.formed a joint venture on January 1,2010.John invested plant and equipment with a book value of $500,000 and a fair value of $800,000 for a 30% interest in the venture which was to be called Jinxtor Ltd.Victor contributed assets with a fair value of $2,000,000 (including $200,000 in cash) for its 70% stake in Jinxtor.Jinxtor reported a net income of $3,000,000 for 2010.John's plant and equipment were estimated to provide an additional 5 years of utility to Jinxtor.
-Assume that the facts provided above with respect to the Jinxtor joint venture remain unchanged except that John receives $200,000 in return for investing its plant and equipment.What would be the recognizable gain on January 1,2010 arising from Jinxtor's investment?

• A)$75,000
• B)$50,000
• C)$200,000
• D)$300,000

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Definitions:

Amino Sugars

A type of sugar molecule that contains an amino group in place of a hydroxyl group, found in many biopolymers and glycoproteins.

Fibronectin

A high-molecular weight glycoprotein of the extracellular matrix that binds to membrane-spanning receptor proteins called integrins, as well as to components such as collagen and fibrin.

Peripheral Proteins

These refer to proteins that are located on the surface of the plasma membrane, either on the exterior or interior side; they are not embedded in the lipid bilayer.

Integral Proteins

Proteins that are permanently embedded within the lipid bilayer of cell membranes, playing roles in various cellular functions including transport and signal transduction.