The Following Information Pertains to Questions

question 73

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 $240,000 in return for investing its plant and equipment.What would be the recognizable gain arising from this transaction on December 31,2010?

• A)$ 24,900
• B)$ 30,000
• C)$ 12,450
• D)$ 16,500

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Definitions:

Fear God

A religious or spiritual concept that encompasses respect, awe, and reverence toward a deity.

Judgmental

Inclined to make judgments, especially moral or personal ones, about others often prematurely or without all the facts.

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.

Fixed-Interval Reinforcement

A schedule of reinforcement where the first response is rewarded only after a specified amount of time has elapsed.