On January 1, Year 1, Prairie Enterprises purchased a parcel of land for $12,200 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 a. Assume that the land was sold for $13,542 in Year 3.

1. (1) Show the effect of the sale on the accounting equation.
2. (2) What amount would Prairie report on the Year 3 income statement related to the sale of the land?
3. (3) What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land?

b. Assume that the land was sold for $11,468 in Year 3.

1. (1) Show the effect of the sale on the accounting equation.
2. (2) What amount would Prairie report on the Year 3 income statement related to the sale of the land?
3. (3) What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land?