Salad Express exchanged land it had been holding for future plant expansion for a more suitable parcel of land along distribution routes. Salad Express reported the old land on the previously issued balance sheet at its original cost of $79,000. According to an independent appraisal, the old land currently is worth $150,000. Salad Express paid $23,500 in cash to complete the transaction. Required
1. What is the fair value of the new parcel of land received by Salad Express?
2. Record the exchange.

1.  $173,500

2. $ 71,000

Explanation:

Requirement 1: Solution

We can calculate the fair value of new parcel of land just by adding the current market price with additional cash paid to complete the transaction

Fair Value = Current market price + cash paid additionally

Fair Value = $150,000+$23,500

Fair value = $173,500

Requirement 2: Solution

We need to calculate Gain/loss on exchange first in order to record them on books. This can be done by just subtracting the land's book value from the current market price of land

Gain/loss on exchange = Current market price - book value

Gain/loss on exchange = $150,000 - $79,000

Gain/loss on exchange = $71,000

Entries:               Debit                          Credit  

New land           $173,500

Old land                                                 $79000

Cash                                                       $23,500

Gain                                                        $71,000

water and oil do not mix because water is hydrophilic (it is attracted to itself) and oil is hydrophobic (it is repelled by water).

they can see what that city is producing and to also see if they can some how get that product. like gold in africa.