On January 1, a company purchased land with a usable building on it for $270,000. At the time of purchase, the fair market values of the land and building were $120,000 and $200,000, respectively. The gain from the purchase of the land and building is:

Question

Quizplus · Accepted Answer

The gain from the purchase is $0 because the transaction is recorded at the purchase price, not the fair market value. Gains are recognized when the asset is sold, not when it is purchased.

On January 1, a Company Purchased Land with a Usable