Mama June Pizza Company Sold Land Costing $39,000 for $51,000

question 52

Multiple Choice

Mama June Pizza Company sold land costing $39,000 for $51,000 cash. Which of the following statements concerning the land sale is correct?

• A) The land account was credited for $51,000.
• B) The revenue account was debited for $51,000.
• C)Operating income increased $12,000.
• D)Income before income taxes increased $12,000.

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Definitions:

S Corporation

A type of corporation that meets specific Internal Revenue Code requirements, allowing profits, and some losses, to be passed directly to owners' personal income without being subject to corporate tax rates.

Rental Income

Income received from renting out property or equipment. This income is reportable and taxable.

Repair Cost

The expense incurred to fix or restore an item to its previous condition without improving or upgrading it beyond its original state.

Condominium

A type of real estate divided into individual units, each separately owned, surrounded by common areas jointly owned.