The purchase of land for a combination of cash and issuance of shares would require which of the following?
A)increase in Land,increase in Common shares,increase in Cash
B)increase in Cash,decrease in Common shares,decrease in Land
C)increase in Land,increase in Common shares
D)increase in Land,increase in Common shares,decrease in Cash

Question

Quizplus · Accepted Answer

The purchase of land using cash and issuance of shares would result in an increase in land asset and an increase in common shares (equity) since new shares are being issued. However, there would be a decrease in cash asset since cash is being used to make the purchase. Therefore, the correct answer is D.

The Purchase of Land for a Combination of Cash and Issuance