ACC 345 One Homework Templabeal Esce Home insert Draw Page Layout Formulas Data Review Vew Tell me what you wont to do G16 2.12 Effect of Valuation Method for Nonmonetary Asset on Balance Sheet and Income Statement Assume Walmart acquires a tract of land on January 1, 2016, for $100,000 cash. On December 31, 2016, the current market value of the land is $150,000. On December 31, 2017, the current market value of the land is $120,000. The firm sells the land on December 31, 2018, for $180,000 cash REQUIRED lenore income taxes. Indicate the effect on the balance sheet and income statement of the preceding information for 2016, 2017, and 2018 under each of the following valuation methods (Parts a-c). 46 50 53 56 57 a. Valuation of the land at acquisition cost until sale of the land (Approach 1) Land would be valued at acquisition cost of $100,000 initially, and would not change through 2018. In 2018, when the building is sold for $180,000, Walmart would recognize a gain of $80,000 on the income statement b. Valuation of the land at current market value and including market value changes each year in net income Approach 2) 61 2016 2017 2018 63 Dr Cr Cash Land Gain on land Loss on land 65 67 71 72 73 c. Valuation of the land at current market value but including unrealized gains and losses in accumulated other comprehensive income until sale of the land (Approach 3) 2016 2017 2018 75 Cr Cash Land Gain on sale of land Unrealized gain-OCI Unrealized loss- OCI 79 d. Why is retained earnings on December 31, 2018, equal to $80,000 in all three cases despite the reporting of different amounts of net income each year? Net income over sufficiently long time periods equals cash inflows minus cash outflows. Walmart acquired the land itn 2016 for $100,000 and sold it for $180,000 in 2018. Thus, the total effect on net income through the realization of the increase in the value of the land bought and sold is $80,000. The three different methods of asset valuation and income