Aa.29. John Inc and Victor Inc. formed a joint venture on January 1, 2020. John invested plant and equipment with a bookvalue 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 2020. John's plant and equipment were estimated to provide anadditional 5 years of utility to Jinxtor. The transactions set out above were considered to have commercial substance.What would be the recognizable gain on January 1, 2020 arising from John's investment in Jinxtor?Select one:OA NilOB. $210,000OC $90,000OD $300.000

A joint venture is essentially an entity that’s created by two or more parties, usually…

Answered: recognizable gain

Business

Accounting

recognizable gain

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 22PC

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