If a Parcel of Land That Was Originally Purchased for $85,000

question 85

Multiple Choice

If a parcel of land that was originally purchased for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000. What is the effect of the sale on the accounting equation for the seller?

• A) Assets increase $52,000; owner's equity increases $52,000.
• B) Assets increase $85,000; owner's equity increases $85,000.
• C) Assets increase $137,000; owner's equity increases $137,000.
• D) Assets increase $140,000; owner's equity increases $140,000.
• E) Assets decrease $85,000; owner's equity decreases $85,000.