Base Inc. (Base) and Space Ltd. (Space) formed a joint venture, Moon Ltd., on January 1, 2023. Base invested plant and equipment with a book value of $300,000 and a fair value of $900,000 for a 30% interest in the joint venture. Base's plant and equipment were estimated to provide an additional 5 years of utility to Moon. Space contributed assets with a fair value of $2,100,000 for its 70% stake in Moon. Moon reported a net income of $2,800,000 for 2023. The transactions set out above were considered to have commercial substance. Assuming the plant and equipment transferred by Base are used to generate a positive gross profit for Moon, what portion of the unrealized gain arising from the transfer of Base's assets is realized for 2023? Nil $10,800 $126,000 $36,000

Base Inc. (Base) and Space Ltd. (Space) formed a joint venture, Moon Ltd., on January 1, 2023. Base invested plant and equipment with a book value of $300,000 and a fair value of $900,000 for a 30% interest in the joint venture. Base's plant and equipment were estimated to provide an additional 5 years of utility to Moon. Space contributed assets with a fair value of $2,100,000 for its 70% stake in Moon. Moon reported a net income of $2,800,000 for 2023. The transactions set out above were considered to have commercial substance. Assuming the plant and equipment transferred by Base are used to generate a positive gross profit for Moon, what portion of the unrealized gain arising from the transfer of Base's assets is realized for 2023? Nil $10,800 $126,000 $36,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 18E

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