Question
On January 1, Year 1, Prairie Enterprises purchased a parcel of land for $11,100 cash. At the time of purchase, the company planned to use
On January 1, Year 1, Prairie Enterprises purchased a parcel of land for $11,100 cash. At the time of purchase, the company planned to use the land for a warehouse site. In Year 3, Prairie Enterprises changed its plans and sold the land.
Required
Assume that the land was sold for $12,321 in Year 3.
(1) Show the effect of the sale on the accounting equation.
(2) What amount would Prairie report on the Year 3 income statement related to the sale of the land?
(3) What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land?
Assume that the land was sold for $10,434 in Year 3.
(1) Show the effect of the sale on the accounting equation.
(2) What amount would Prairie report on the Year 3 income statement related to the sale of the land?
(3) What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land?
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Survey of Accounting
Authors: Carl S. Warren
7th edition
1285974360, 1285183487, 9781285974361, 978-1285183480
