Two independent companies, waterway co. and pharoah co., are in the home building business. each owns a tract of land held for development, but each would prefer to build on the other's land. they agree to exchange their land. an appraiser was hired, and from her report and the companies' records, the following information was obtained: waterway's land pharoah's land cost and book value $572400 $313200 fair value based upon appraisal 81 636300 the exchange was made, and based on the difference in appraised fair values, pharoah paid $173700 to waterway. the exchange lacked commercial substance. for financial reporting purposes, waterway should recognize a pre-tax gain on this exchange of?