B is corrent. A property dividend is a nonreciprocal transfer of nonmonetary assets between an enterprise and its owners. A transfer of a nonmonetary asset to a stockholder or to another entity in a nonreciprocal transfer should be recorded at the fair value of the asset transferred, and a gain (loss) should be recognized on the disposition of the asset. The fair value of the property on the declaration date less the carrying value of the property equals the gain (loss). Because the trading securities were purchased in the current year, they have not yet been adjusted to fair value. Therefore, the carrying value at the date of declaration is $200,000, and the amount of gain to be recognized is $300,000 - $200,000 = $100,000.
A is incorrect. A property dividend is a nonreciprocal transfer of nonmonetary assets between an enterprise and its owners. A transfer of a nonmonetary asset to a stockholder or to another entity in a nonreciprocal transfer should be recorded at the fair value of the asset transferred, and a gain (loss) should be recognized on the disposition of the asset. The fair value of the property on the declaration date less the carrying value of the property equals the gain (loss). Because the trading securities were purchased in the current year, they have not yet been adjusted to fair value. Therefore, the carrying value at the date of declaration is $200,000, and the amount of gain to be recognized is $300,000 - $200,000 = $100,000.
C is incorrect. A property dividend is a nonreciprocal transfer of nonmonetary assets between an enterprise and its owners. A transfer of a nonmonetary asset to a stockholder or to another entity in a nonreciprocal transfer should be recorded at the fair value of the asset transferred, and a gain (loss) should be recognized on the disposition of the asset. The fair value of the property on the declaration date less the carrying value of the property equals the gain (loss). Because the trading securities were purchased in the current year, they have not yet been adjusted to fair value. Therefore, the carrying value at the date of declaration is $200,000, and the amount of gain to be recognized is $300,000 - $200,000 = $100,000.
D is incorrect. A property dividend is a nonreciprocal transfer of nonmonetary assets between an enterprise and its owners. A transfer of a nonmonetary asset to a stockholder or to another entity in a nonreciprocal transfer should be recorded at the fair value of the asset transferred, and a gain (loss) should be recognized on the disposition of the asset. The fair value of the property on the declaration date less the carrying value of the property equals the gain (loss). Because the trading securities were purchased in the current year, they have not yet been adjusted to fair value. Therefore, the carrying value at the date of declaration is $200,000, and the amount of gain to be recognized is $300,000 - $200,000 = $100,000.
|
