## Answers

As per the above given Information, Marsha Exchanged a land with FMV of $72,700 and also paid $5000 cash for land of FMV of $57,700 and also received an automobile worth $20,000.Hence profit or loss for the above transaction can be calculated as follows:

As per IND AS, In case of exchange of land the exchange value will be the Fair value of Asset received or Fair value of asset forgone which ever is more clear. Hence, in this case,

The fiar value of Asset received = Fair value of asset forgone

,=> Fair value of Asset received = $ 57,700 + $ 20,000 =$ 77,700

=> Fair value of Asset forgone = $72,700 +$5000 = $77,700

Hence in this case there is no profit or loss on the exchange of assets, since the fair values of assets exchanged are the same.

Hence the correct option is Option A.

Option D cannot be the answer because adjusted basis of land cannot be taken for calculation of profit or loss on exchange of the assets when fair value is known. Since the fair values are given in the above information, it is assumed at books are restated periodically at fair values.

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