Unformatted text preview: office tower expired in 2008. Hi-Tech's financial position deteriorated substantially and management concluded in 2008 that the commencement of construction of the new head office would be too great a financial drain. Shortly thereafter, a developer approached Hi-Tech and suggested a joint-venture to construct an exclusive community of homes on the excess acreage. The joint venture agreement provided that Hi-Tech would receive 20% of the proceeds from the sale of the 20 homes, to a maximum of $500,000. All homes were constructed and sold by the end of 2008 and Hi-Tech received $500,000. Required : Discuss the alternative methods of treating the gain on the sale of the five acres of land and recommend the position which Hi-Tech should take when filing their 2008 income tax return....
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This note was uploaded on 11/19/2010 for the course ACC 742 taught by Professor Sydor during the Spring '10 term at Ryerson.
- Spring '10