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:

Proportionate Costs

Expenses that vary in relation to the level of activity or volume of output in a business, similar to variable costs.

Wholesale Costs

The price charged for goods or materials when sold in large quantities to retailers or other businesses, as opposed to retail prices charged to consumers.

Overhead Expenses

Costs not directly tied to the production of goods or services but necessary for running a business, such as rent and utilities.

Fraction Form

A mathematical expression representing the division of one quantity by another.