Answer:
To determine the gains or losses, you subtract the cost from the selling price for both the land and inventory:
For land:
Gain on Land = Selling Price - Cost = $160,000 - $150,000 = $10,000 (Gain)
For inventory:
Gain on Inventory = Selling Price - Cost = $85,000 - $60,000 = $25,000 (Gain)
So, the company will report:
a) A gain of $10,000 on land and a gain of $25,000 on inventory.
Step-by-step explanation: