A firm recently learned that a piece of land identical to the land it owns sold for $10,000 in 20X2. ABC paid $8,000 for its land in 20X1 and this land is recorded within property, plant and equipment on ABCs balance sheet at $8,000 at the end of 20X1. Assume ABC reports under US GAAP and accounts for land using the cost principle. Regarding its land, ABC should record the following in ABCs 20X2 financial statements upon obtaining knowledge about the identical land sale of $10,000:

a.

None of the listed answers

b.

Revalue ABCs land to $10,000 and recognize a $10,000 gain

c.

No entries should be recorded in the period 20X2 (no changes should be made to the property, plant and equipment balance)

d.

Revalue ABCs land to $10,000 and recognize a $2,000 gain

e.

Record a $2,000 gain but do nothing to the value of ABCs land