In Lynne Company There Was an Increase in the Land

question 98

Multiple Choice

In Lynne Company there was an increase in the land account during the year of $43000. Analysis reveals that the change resulted from a cash sale of land at cost $115000 and a cash purchase of land for $158000. In the statement of cash flows the change in the land account should be reported in the investment section:

• A) as a net purchase of land $43000.
• B) only as a purchase of land $158000.
• C) as a purchase of land $158000 and a sale of land $115000.
• D) only as a sale of land $115000.

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Definitions:

Fixed Expenses

Costs that remain constant for a given period regardless of the level of production or sales, such as rent or salaries.

Variable Expenses

Expenses that change in proportion to the activity of a business.

Financial Advantage

A benefit gained in financial terms, which can result from factors such as cost savings, investment returns, or other monetary gains.

Outside Supplier

An external organization that provides goods or services to another company.