Answer:
assets increase by $53,010; owner’s equity increases by $53,010
Explanation:
Calculation for the What is the effect of the sale on the accounting equation
Using this formula
Profit on sale of land = Proceed from sale - Cost of land
Let plug in the formula
Profit on sale of land =$78,584 -$25,574
Profit on sale of land = $53,010
The accounts that will be affected in the accounting equation are:
Cash will increase by $78,584
Land will decrease by $25,574
Owners equity will increase by $53,010
Therefore the effect of the sale on the accounting equation is that Assets increase by $53,010; Owner’s equity increases by $53,010
