INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR
INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR
10th Edition
ISBN: 9781264038947
Author: Libby
Publisher: MCG
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Chapter 3, Problem 18E

1.

To determine

Identify the amounts for assets, liabilities, and stockholders’ equity.

1.

Expert Solution
Check Mark

Explanation of Solution

Identify the amount:

Assets=Liabilities+Stockholders’ Equity
3,200 2,400 800
8,000 5,600 4,000
6,400 1,600 3,200
$17,600=$9,600+$8,000

Table (1)

Note:

  • Assets include cash, accounts receivable, and long-term investments.
  • Liabilities include accounts payable, unearned revenue, and long-term note payable.
  • Stockholders’ equity includes common stock, additional paid-in capital, and retained earnings.

2.

To determine

Prepare the T- account and enter the amount for the given transaction in their respective accounts.

2.

Expert Solution
Check Mark

Explanation of Solution

Prepare the T-accounts:

Cash account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  1

Accounts receivable account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  2

Long-term investment account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  3

Accounts payable account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  4

Unearned revenue account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  5

Long-term note payable account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  6

Common stock account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  7

Additional paid-in capital account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  8

Retained earnings account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  9

Consulting fees revenue account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  10

Interest revenue account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  11

Wages expense account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  12

Travel expense account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  13

Utilities expense account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  14

Rent expense account:

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR, Chapter 3, Problem 18E , additional homework tip  15

Thus, the t-accounts are prepared and the ending balances are calculated.

3.

To determine

Ascertain the amount for the given equations at the end of the December.

3.

Expert Solution
Check Mark

Explanation of Solution

For the equationRevenuesExpenses=Net income:

RevenueExpenses=Net income$58,400$56,400=$2,000

For the equationAssets=Liabilities+Stockholders' equity:

Assets=Liabilities+Stockholders' equity$19,920=$10,400+$9,520

Working note (1):

Calculate the revenues:

Revenues=Revenue from sales+Revenue from investments=$58,000+$400=$58,400

Working note (2):

Calculate the expenses:

Expenses=(Wages expenses+Utilities expenses+Travel expenses+Rent expenes)=$36,000+$800+12,000+$7,600=$56,400

Calculate the net income:

ParticularsAmount ($)Amount ($)
Revenues
  1. (1) 58,400
 
Less: Expenses
  1. (2) 56,400
 
Net income $2,00

Table (2)

Calculate the amount for the accounting equation:

Assets=Liabilities+Stockholders’ Equity
$1,120 $1,600 $800
$12,400 $7,200 $4,000
$6,400 $1,600 $2,720
    $2,000
$19,920=$10,400+$9,250

Table (3)

4.

To determine

Calculate the net profit margin ratio for 2019.

4.

Expert Solution
Check Mark

Explanation of Solution

Net profit margin ratio can be calculated by using the following formula:

Net profit margin ratio=Net incomeNet sales revenues

Calculate the net profit margin ratio for 2019:

Net profit margin ratio=Net incomeNet sales revenue=$2,000$58,000×100=3.45%

Hence, the net profit margin ratio for the year 2019 is 3.45%.

  • By computing the net profit margin ratio, Company KK net profit margin ratio is 3.45%. This indicates that there is an increase in the net profit margin ratio.
  • Company KK has become effective in managing its sales and the expenses.

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Chapter 3 Solutions

INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR

Ch. 3 - 10. Complete the following matrix by entering...Ch. 3 - Prob. 12QCh. 3 - 13. State the equation for the net profit margin...Ch. 3 - 1. Which of the following is not a specific...Ch. 3 - 2. Which of the following is not one of the...Ch. 3 - 3. The expense recognition principle...Ch. 3 - Prob. 4MCQCh. 3 - Prob. 5MCQCh. 3 - During 2019, CliffCo Inc. incurred operating...Ch. 3 - 7. Which of the following is the entry to be...Ch. 3 - 8. You have observed that the net profit margin...Ch. 3 - Prob. 9MCQCh. 3 - 10. This period a company collects SI00 cash on an...Ch. 3 - Prob. 1MECh. 3 - Reporting Cash Basis versus Accrual Basis...Ch. 3 - The following transactions are July activities of...Ch. 3 - The following transactions are July activities of...Ch. 3 - The following transactions are July activities of...Ch. 3 - The following transactions are July activities of...Ch. 3 - The following transactions are July activities of...Ch. 3 - The following transactions are July activities of...Ch. 3 - The following transactions are July activities of...Ch. 3 - The following data are from annual reports of...Ch. 3 - Prob. 11MECh. 3 - Matching Definitions with Terms Match each...Ch. 3 - Prob. 2ECh. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Amazon.com, Inc., headquartered in Seattle, WA,...Ch. 3 - Wolverine World Wide, Inc., manufactures military,...Ch. 3 - Sysco Corporation, formed in 1969, is the largest...Ch. 3 - Vail Resorts, Inc., owns and operates 11 premier...Ch. 3 - Recording Journal Entries Blaine Air Transport...Ch. 3 - Prob. 10ECh. 3 - Stacey’s Piano Rebuilding Company has been...Ch. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Prob. 16ECh. 3 - Kate’s Kite Company (a corporation) sells and...Ch. 3 - Prob. 18ECh. 3 - Prob. 19ECh. 3 - Prob. 20ECh. 3 - The following is a list of accounts for Sanjeev...Ch. 3 - Ryan Terlecki organized a new Internet company,...Ch. 3 - According to its annual report, The Wendy’s...Ch. 3 - Prob. 4PCh. 3 - Kaylee James, a connoisseur of fine chocolate,...Ch. 3 - Prob. 6PCh. 3 - Cedar Fair, L.P. (Limited Partnership), is one of...Ch. 3 - The following is a series of accounts for Kruger &...Ch. 3 - Jimmy Langenberger is the president of TemPro,...Ch. 3 - Barnes & Noble is the nation’s largest bookseller...Ch. 3 - Alpine Stables, Inc., is established in Denver,...Ch. 3 - Alpine Stables, Inc., is established in Denver,...Ch. 3 - Prob. 6APCh. 3 - Penny’s Pool Service & Supply, Inc. (PPSS), had...Ch. 3 - Prob. 1CPCh. 3 - Refer to the financial statements of Express, Inc....Ch. 3 - Refer to the financial statements of American...Ch. 3 - Prob. 4CPCh. 3 - Prob. 5CPCh. 3 - Prob. 6CP
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