In the Green Company, the beginning and ending balances in Land were $264,000 and $320,000 respectively. During the year, land costing $60,000 was sold for $60,000 cash, and land costing $116,000 was purchased for cash. The entries in the reconciling columns of the worksheet will include a:
A) credit to Land $60,000 and a debit to Sale of Land $60,000 under investing activities.
B) debit to Land $116,000 and a credit to Purchase of Land $116,000 under financing activities.
C) net debit to Land $56,000 and a credit to Purchase of Land $56,000 under investing activities.
D) credit to Land $60,000 and a debit to Sale of Land $60,000 under financing activities.

Question

Quizplus · Accepted Answer

The sale of land for cash is recorded as a credit to Land and a debit to Sale of Land under investing activities, as it involves cash flow from the sale of an asset.

In the Green Company, the Beginning and Ending Balances in Land