Fundamentals of Financial Accounting
5th Edition
ISBN: 9780078025914
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 3, Problem 3.11E
Recording
Rowland & Sons Air Transport Service, Inc., has been in operation for three years. The following transactions occurred in February:
| Feb. 1 | Paid $200 for rent of hangar space in February. |
| Feb. 4 | Received customer payment of $800 to ship several items to Philadelphia next month. |
| Feb. 7 | Flew cargo from Denver to Dallas; the customer paid in full ($900 cash). |
| Feb. 10 | Paid pilots $1,200 in wages for flying in February. |
| Feb. 14 | Paid $100 for an advertisement run in the local paper on February 14. |
| Feb. 18 | Flew cargo for two customers from Dallas to Albuquerque for $1,700; one customer paid $500 cash and the other asked to be billed $1,200. |
| Feb. 25 | Purchased on account $1,350 in supplies for future use on the planes. |
Required:
Prepare accrual basis journal entries for each transaction. Be sure to categorize each account as an Asset (A), Liability (L), Stockholders’ Equity (SE), Revenue (R), or Expense (E). Also, calculate the company’s preliminary net income and net profit margin expressed as a percent (to one decimal place).
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Griffin Air Transport Service, Incorporated, providing air delivery service for businesses, has been in operation for three years. The
following transactions occurred in February:
February 1 Paid $235 for rent of hangar space in February.
February 2 Purchased fuel costing $570 on account for the next flight to Dallas.
February 4 Received customer payment of $850 to ship several items to Philadelphia next month.
February 7 Flew cargo from Denver to Dallas; the customer paid $860 for the air transport.
February 10 Paid $190 for an advertisement in the local paper to run on February 19.
February 14 Paid pilot $2,400 in wages for flying in January (recorded as expense in January).
February 18 Flew cargo for two customers from Dallas to Albuquerque for $4,200; one customer paid $1,100 cash and the other
asked to be billed.
February 25 Purchased on account $2,630 for a supply of spare parts for the planes.
February 27 Declared a $150 cash dividend to be paid in March.
Required:
Prepare…
Feb. 1 Paid $390 for rent of hangar space in February.Feb. 4 Received customer payment of $710 to ship several items to Philadelphia next month.Feb. 7 Flew cargo from Denver to Dallas; the customer paid in full ($1,070 cash).Feb. 10 Incurred and paid $2,000 in pilot wages for flying in February.Feb. 14 Paid $168 for an advertisement run in the local paper on February 14.Feb. 18 Flew cargo for two customers from Dallas to Albuquerque for $1,950; one customer paid $590 cash and the other asked to be billed $1,360.Feb. 25 Purchased on account $1,725 in supplies for future use on the planes.Required:Prepare accrual basis journal entries for each transaction.Calculate the company’s preliminary net income.Calculate the company’s net profit margin expressed as a percent.
Question involving Revenue Recognition:
How much revenue should be recognized by the following Company, in each of the month's of March, April, May, June, July, August, and September?
A company pre-sells services to be performed from May through September, inclusive. If payment is made in full by April 1, a 4% discount is allowed. In March, 245 customers took advantage of the discount and purchased the services for $650 each. In June, 220 customers purchased the services for $785, and in July, 95 purchased it for the same price. For the customers who pay after May 1, services start in the month the customer makes the payment.
Please explain for each month.
Months
$
March
April
May
June
July
August
September
Chapter 3 Solutions
Fundamentals of Financial Accounting
Ch. 3 - Prob. 1QCh. 3 - When accounting was developed in the 14th and 15th...Ch. 3 - Define accrual basis accounting and contrast it...Ch. 3 - Prob. 4QCh. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Explain the expense recognition principle...Ch. 3 - Explain why stockholders equity is increased by...Ch. 3 - Explain why revenues are recorded as credits and...Ch. 3 - Complete the following table by entering either...
Ch. 3 - Complete the following table by entering either...Ch. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - What is the difference between Accounts Receivable...Ch. 3 - What is the difference between Accounts Payable...Ch. 3 - For each of the following situations, indicate...Ch. 3 - Prob. 17QCh. 3 - Which of the following items is not a specific...Ch. 3 - Prob. 2MCCh. 3 - Prob. 3MCCh. 3 - Prob. 4MCCh. 3 - If a company incorrectly records a payment as an...Ch. 3 - Prob. 6MCCh. 3 - Prob. 7MCCh. 3 - Prob. 8MCCh. 3 - Webby Corporation reported the following amounts...Ch. 3 - Prob. 10MCCh. 3 - Prob. 3.1MECh. 3 - Identifying Accrual Basis Revenues The following...Ch. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Recording Accrual Basis Revenues For each of the...Ch. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 3.6MECh. 3 - Prob. 3.7MECh. 3 - Prob. 3.8MECh. 3 - Prob. 3.9MECh. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Prob. 3.11MECh. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 3.13MECh. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Prob. 3.16MECh. 3 - Determining the Accounting Equation Effects of...Ch. 3 - Prob. 3.18MECh. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Preparing Financial Statements from a Trial...Ch. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Prob. 3.22MECh. 3 - Calculating and Interpreting Net Profit Margin...Ch. 3 - Prob. 3.1ECh. 3 - Matching Definitions with Terms Match each...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Prob. 3.10ECh. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Recording and Posting Accrual Basis Journal...Ch. 3 - Prob. 3.13ECh. 3 - Analyzing Transactions from the Perspectives of...Ch. 3 - Prob. 3.15ECh. 3 - Determining Accounting Equation Effects of Several...Ch. 3 - Preparing Journal Entries For each of the...Ch. 3 - Prob. 3.18ECh. 3 - Creating an Unadjusted Trial Balance Based on the...Ch. 3 - Inferring Transactions, Creating Financial...Ch. 3 - Determining the Effects of Various Transactions EZ...Ch. 3 - COACHED PROBLEMS Recording Nonquantitative Journal...Ch. 3 - Prob. 3.2CPCh. 3 - Prob. 3.3CPCh. 3 - Prob. 3.4CPCh. 3 - Prob. 3.1PACh. 3 - Recording Journal Entries Diana Mark is the...Ch. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Prob. 3.4PACh. 3 - Prob. 3.1PBCh. 3 - Prob. 3.2PBCh. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Analyzing, Journalizing, and Interpreting Business...Ch. 3 - Prob. 3.1COPCh. 3 - SKIL_S DEVELOPMENT CASES Finding Financial...Ch. 3 - Prob. 3.2SDCCh. 3 - Prob. 3.4SDCCh. 3 - Ethical Decision Making: A Mini-Case Mike Lynch is...Ch. 3 - Accounting for Business Operations Starting in...
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