Answer and Explanation:
<u>LEE INC.</u>
<u>Effect of events on the general ledger accounts</u>
<u>Event Cash Account land Account Common stock Retained</u>
<u> receivable Payable Earnings</u>
Sales
on account 62,000 62,000
collected 51,000 -51,000
Expenses 39,000 -39,000
Account
Payable -31,000 -31,000
Issue of stock 40,000 40,000
Purchase land -21,000 21,000
<u>Totals 39,000 11,000 21,000 8,000 40,000 23,000</u>
The computation of the amount of revenue recognized would be equivalent to the service performed i.e. $62,000