On January 1, 2011, Arizona Enterprises purchased a parcel of land for \(\$ 16,000\) cash. At the time of purchase, the company planned to use the land for a warehouse site. In 2013, Arizona Enterprises changed its plans and sold the land.

Required

a. Assume that the land was sold for \(\$ 15,000\) in 2013.

(1) Show the effect of the sale on the accounting equation.

(2) What amount would Arizona report on the 2013 income statement related to the sale of the land?

(3) What amount would Arizona report on the 2013 statement of cash flows related to the sale of the land?

b. Assume that the land was sold for \(\$ 18,000\) in 2013 .

(1) Show the effect of the sale on the accounting equation.

(2) What amount would Arizona report on the 2013 income statement related to the sale of the land?

(3) What amount would Arizona report on the 2013 statement of cash flows related to the sale of the land?