Question

Question 5 4 pts LPYT Company began operations in 2024 and entered into the following transactions: June 1: Sold common stock to owners for $240,000 cash July 8: Purchased inventory costing $49,000 on account July 22: Purchased land costing $80,000. LPYT Company paid $60,000 cash immediately and agreed to pay the remaining amount later. August 1: Received $23,000 cash from a customer as payment for services to be provided each month, starting in August, for the next 25 months September 1: Purchased a 2-year insurance policy for $48,000 cash October 3: Sold three-fourths of the inventory purchased on July 8 for $90,000 cash November 9: Paid stockholders a dividend in the amount of $10,000 December 14: Sold the land purchased on July 22 for $107,000 cash. December 31: Recorded all necessary adjusting entries for 2024 Calculate the amount of total expenses reported on LPYT Company's 2024 income statement.

Answer 1

date	explanation	Debit	Credit
1 june	cash dr	$ 240000
	common stock		$240000
	(common stock issued)
8 july	Purchase dr	$ 49000
	accounts payable		$49000
	(purchase on accounts)
22 july	land dr	$80000
	cash		$60000
	Accounts payable		$ 20000
	(land purchased)
1 aug	cash dr	$23000
	unearned revenue		$ 23000
	(advance from client)
1 september	prepaid insurance dr	$ 48000
	cash		$ 48000
	(2 years insurance policy purcased)
3 october	cash dr	$ 90000
	sales revenue		$ 90000
	(cash sales )
	cost of goods sold dr	$ 36750
	to inventory		$ 36750
	(record cost of goods sold )
9 nov.	Retained earning dr	$ 10000
	Dividend payable		$ 10000
	(declaration of dividend )
	dividend payable	$ 10000
	cash		$ 10000
	(dividend payment )
14 december	cash dr	107000
	land		$ 80000
	gain on sold of land		$ 27000
	( land sold )

Sales	$90000
Service revenue (23000/25*5)	$ 4600
Total revenue	$ 94600
Gain on sale of land	$27000
Total income	121600
Expenses
Cost of goods sold	$ 36750
Insurance expense (48000/2)	$ 24000
Total expense	$ 60750
Net income	$ 60850