On January 1, 2018, Prairie Enterprises purchased a parcel of land for $14,000 cash. At the time of purchase, the company planned to use the land for a warehouse site. In 2020, Prairie Enterprises changed its plans and sold the land. Required Assume that the land was sold for $15,540 in 2020. (1) Show the effect of the sale on the accounting equation. (2) What amount would Prairie report on the 2020 income statement related to the sale of the land? (3) What amount would Prairie report on the 2020 statement of cash flows related to the sale of the land? Assume that the land was sold for $13,160 in 2020. (1) Show the effect of the sale on the accounting equation. (2) What amount would Prairie report on the 2020 income statement related to the sale of the land? (3) What amount would Prairie report on the 2020 statement of cash flows related to the sale of the land?
On January 1, 2018, Prairie Enterprises purchased a parcel of land for $14,000 cash. At the time of purchase, the company planned to use the land for a warehouse site. In 2020, Prairie Enterprises changed its plans and sold the land.
Required
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Assume that the land was sold for $15,540 in 2020.
-
(1) Show the effect of the sale on the
accounting equation.
-
(2) What amount would Prairie report on the 2020 income statement related to the sale of the land?
-
(3) What amount would Prairie report on the 2020 statement of
cash flows related to the sale of the land?
-
Assume that the land was sold for $13,160 in 2020.
-
(1) Show the effect of the sale on the accounting equation.
-
(2) What amount would Prairie report on the 2020 income statement related to the sale of the land?
-
(3) What amount would Prairie report on the 2020 statement of cash flows related to the sale of the land?
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