Lopez Sales Company had the following balances in its accounts on January 1, Year 2: Cash Merchandise Inventory Land Common Stock Retained Earnings Lopez experienced the following events during Year 2: 1. Sold merchandise inventory that cost $30,400 for $64,600. 2. Sold land that cost $39,200 for $73,500. Required: $ 58,000 38,000 98,000 78,000 116,000 a. Determine the amount of gross margin recognized by Lopez. b. Determine the amount of the gain on the sale of land recognized by Lopez. a. Gross margin b. Gain on sale of land

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Lopez Sales Company had the following balances in its accounts on January 1, Year 2:
Cash
Merchandise Inventory
Land
Common Stock
Retained Earnings
$ 58,000
38,000
98,000
78,000
116,000
Lopez experienced the following events during Year 2:
1. Sold merchandise inventory that cost $30,400 for $64,600.
2. Sold land that cost $39,200 for $73,500.
Required:
a. Determine the amount of gross margin recognized by Lopez.
b. Determine the amount of the gain on the sale of land recognized by Lopez.
a. Gross margin
b. Gain on sale of land
Transcribed Image Text:Lopez Sales Company had the following balances in its accounts on January 1, Year 2: Cash Merchandise Inventory Land Common Stock Retained Earnings $ 58,000 38,000 98,000 78,000 116,000 Lopez experienced the following events during Year 2: 1. Sold merchandise inventory that cost $30,400 for $64,600. 2. Sold land that cost $39,200 for $73,500. Required: a. Determine the amount of gross margin recognized by Lopez. b. Determine the amount of the gain on the sale of land recognized by Lopez. a. Gross margin b. Gain on sale of land
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