Palomar Paper Products bought land in 1993 for $15,000 cash. The company has held the land since that time. In 2011 Palomar purchased additional tract of land for $15,000 cash. Presume that prices in general increased by 60% from 1993 to 2011.

a. Presuming that Palomar made only these two land purchases what dollar quantity would appear in the land account on Palomar's balance sheet as of December 31, 2011.

b. Palomar used $15,000 cash to make all land purchase. Would $15,000 in 1993 purchase the same amount of goods and services as $15,000 in 2011? If not how much more or less and why?

c. Describe how one could adjust the dollar amount reported in the land account as of December 31, 2011, if the steady dollar assumption were dropped.