Lano Corp.’s forest land was condemned for use as a national park. Compensation for the condemnation exceeded the forest land’s carrying amount. Lano purchased similar, but larger, replacement forest land for an amount greater than the condemnation award. As a result of the condemnation and replacement, what is the net effect on the carrying amount of forest land reported in Lano’s balance sheet?

a. The amount is increased by the excess of the replacement forest land’s cost over the condemned forest land’s carrying amount.

b. The amount is increased by the excess of the replacement forest land’s cost over the condemnation award.

c. The amount is increased by the excess of the condemnation award over the condemned forest land’s carrying amount.

d. No effect, because the condemned forest land’s carrying amount is used as the replacement forest land’s carrying amount.