Question

LPW Company began operations on June 1, 2019. The company entered into the following transactions during 2019: June 1: Sold common stock to owners in the amount of $311,000 and borrowed $69,000 from the bank on a three-year note payable. June 1: Purchased a parcel of land costing $159,000 by paying $59,000 in cash and agreeing to pay the remainder within 90 days. July 31: LPW Company earned and received $24,000 of interest on its bank accounts in July. August 1: LPW sold the land purchased on June 1 for $91,990 cash. August 18: Purchased inventory costing $62,000 on account. November 2: Sold one-half of the inventory purchased on August 18 for $192,000. The customer did not pay any cash at the time of purchase, but did agree to pay the entire balance due within sixty days. November 30: Received a $36,000 bill for advertising done during the month of November. No payment was made at this time. Calculate the amount of net income reported in LPW Company's 2019 income statement.

Answer 1

38 39 40 41 192,000 31,000 161,000 36,000 125,000 42 Sales Revenue Less Cost of Goods Sold (62000/2) Gross Profit Advertising expense Operating Income Other Incomes and (Expenses) Interest Revenue Loss on sale of Land(159000-91000) Net Income 43 44 45 24,000 -68,000 46 -44,000 81,000 47 48 49 Net Income reported in LPW Company's 2019 Income Statement is $81,000 50 51