On January 1, 2017, Grouper Corporation sold a building that cost $257,510 and that had accumulated depreciation of $102,150 on the date of sale. Grouper received as consideration a $247,510 non-interest-bearing note due on January 1, 2020. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2017, was 9%. At what amount should the gain from the sale of the building be reported

Gain from the sale of the building be reported = $35,763.13

Explanation:

Book Value of Building in sweet Corporation = Cost of the Building - Accumulated depreciation

=$257,510 - $102,150

=$155,360

Consideration receivable on January 1,2017 = $247,510

Present value factor for 3 years at 9% = 1/(1+0.09)³ =0.77218

Present value of consideration receivable = $247,510 X 0.77218 =$191,123.13

Gain from sale of Building be reported = Present value of consideration - Book value of asset

=$191,123.13 - $155,360 =$35,763.13

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