Everest Acres Development Corporation recently sold a parcel of land for $50,000 more than its cost.This transaction:

Question

Quizplus · Accepted Answer

When Everest Acres Development Corporation sells a parcel of land for $50,000 more than its cost, it generates a gain on the sale. This gain increases the corporation's shareholders' equity and assets. The corporation's assets increase by the amount of the sale, which is $50,000. The shareholders' equity increases by the same amount as the gain on the sale is recognized in the income statement, which ultimately increases the retained earnings and thus the shareholders' equity. Therefore, option B is the correct choice.

Everest Acres Development Corporation Recently Sold a Parcel of Land