Chris co. purchased land adjacent to its factory. Chris co. plans to hold this land and sell it at some future date, and hopes to earn a profit from holding the land. How should Chris Co. classify this land on its balance sheet and why?

A. As property, plant, and equipment because if the land is sold at a profit the profit will be reported as part of net income

B. As an investment, because it is not being used in the normal course of business.

C. As property, plant, and equipment because it provides the company with potential productive capacity.

D. As an investment, because the company cannot be assured that the land will eventually be sold at a profit.

Answer rating: 100% (QA)

Solution As an investment because it is not being used ... View the full answer