MD Owns a Tract of Land, Which It Purchased in 2010

question 30

Multiple Choice

MD owns a tract of land, which it purchased in 2010 for $100,000. The land is held as a future plant site and has a fair market value of $140,000 on July 1, 2013. HC also owns a tract of land held as a future plant site. HC paid $180,000 for the land in 2011 and the land has a fair market value of $200,000 on July 1, 2013. On this date, MD exchanged its land and paid $50,000 cash for the land owned by HC. At what amount should MD record the land acquired in the exchange?

• A) $150,000
• B) $160,000
• C) $190,000
• D) $200,000

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Definitions:

Market Price

The ongoing rate at which a service or asset is available for sale or purchase.

Supply of Houses

The total number of residential properties available for purchase or rent in a given geographical area.

Colorado Springs

A city located in the state of Colorado, USA, known for its picturesque landscapes and proximity to the Rocky Mountains.

San Diego

A coastal city in California, known for its beaches, parks, and warm climate.