Reference no: EM132842049
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 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 $12,987 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 $10,998 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?
3) What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land?