Webb Industries reported the following information concerning the company’s property, plant, and equipment in the 1997 financial report. 1997 1996 Buildings $ 750,000 $820,000 Accumulated depreciation (100,000) (80,000) Equipment 500,000 380,000 Accumulated depreciation (75,000) (85,000) Land 250,000 250,000 Depreciation expense—buildings 40,000 25,000 Depreciation expense—equipment 15,000 12,000 Listed below are four independent cases involving buildings, equipment, and land during 1997. 1. The company purchased a building for $60,000. 2. The company sold equipment in December 1997 that was purchased for $50,000. It recorded a gain of $5,000 on the sale. 3. The company sold a piece of land for $300,000 at a gain of $75,000. 4. The company acquired a building in exchange for land. The land had a book value of $150,000 and a market value of $600,000. REQUIRED:

a. For each case explain the change from 1996 to 1997 in the affected Buildings, Equipment, and Land accounts. [For example, in case (1) explain the change in the Building account, the related Accumulated Depreciation account, and the balance in the related Depreciation Expense account.]

b. For each case compute the effect on the cash balance and indicate the appropriate disclo¬ sure on the statement of cash flows.