Effect of inventory valuation basis on net income. Colt Real Estate Development Corporation acquired two parcels of land, Parcel A and Parcel B, for $9.000 each on April 15. Year 6. The firm sold Parcel A on August 20. Year 7. for $24,600 and Parcel B on March 16, Year 8, for $19,700. The net realizable values of the two parcels on various dates appear below:

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December 31, Year 6 December 31, Year 7 ... Parcel A $16,700 Parcel B $ 8,500 14,400 The firm uses the calendar year as its accounting period. a. Compute the amount of income from these two parcels of land for Year 6, Year 7, and Year 8, assuming the firm reports land inventory on its balance sheet using (1) acquisition cost, (2) current cost (net realizable value), and (3) lower of cost or market. b. Compare the income for Year 6, Year 7, and Year 8 and for the three years com- bined under the three inventory valuation bases.