Question
On January 1, Year 1, Prairie Enterprises purchased a parcel of land for $11,700 cash. At the time of purchase, the company planned to use
On January 1, Year 1, Prairie Enterprises purchased a parcel of land for $11,700 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
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Assume that the land was sold for $12,987 in Year 3.
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(1) Show the effect of the sale on the accounting equation.
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(2) What amount would Prairie report on the Year 3 income statement related to the sale of the land?
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(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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Assume that the land was sold for $10,998 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?
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(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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Accounting Ethics
Authors: Iris Stuart
1st Edition
1118542401, 9781118542408
