Connect Access Card For Financial Accounting
Connect Access Card For Financial Accounting
10th Edition
ISBN: 9781260481297
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 3, Problem 4P

1 and 2

To determine

Prepare the T- account and enter the transaction into their respective accounts for calculating the ending balance.

1 and 2

Expert Solution
Check Mark

Explanation of Solution

Prepare the T-accounts:

Cash account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  1

Accounts receivable account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  2

Supplies account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  3

Inventory account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  4

Prepaid expenses account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  5

Equipment account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  6

Furniture and fixtures account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  7

Accounts payable account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  8

Notes payable account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  9

Common stock account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  10

Additional paid-in capital account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  11

Cost of goods sold account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  12

Repair expense account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  13

Sales revenue account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  14

Advertising expense account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  15

Wages expense account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 4P , additional homework tip  16

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

3.

To determine

Prepare an unadjusted income statement for the month February.

3.

Expert Solution
Check Mark

Explanation of Solution

Prepare an unadjusted income statement:

Company KS
Income statement (unadjusted)
For the month ended 28th February
ParticularsAmount ($)Amount ($)
Revenues:  
Sales revenue (1)4,700  
Total revenues (A) 4,700
Expenses:  
Cost of goods sold (2)2,200 
Advertising expense400 
Wage expense1,300 
Repair expense400 
Total expenses (B) 4,300
Net Income (AB) $400

Table (1)

Working note (1):

Calculate the total sales revenue:

Total sales revenue=Sales in transaction (h)+Sales in transaction (m)=$3,500+$1,200=$4,700

Working note (2):

Calculate the total cost of goods sold:

Total cost of goods sold=[Cost of goods sold in transaction (h)]+[Cost of goods sold in transaction (m)]=$1,600+$600=$2,200

Hence, the net income of Company KS is $400.

4.

To determine

Write a memo to Person K regarding the results of operations during the first month of the business.

4.

Expert Solution
Check Mark

Explanation of Solution

MEMO

From

XYZ

To

Person K

Company KS

28th February,

Subject: Results of operations during the first month of the business.

After the evaluation of effects of the transactions of Company KS, one can conclude that the company has earned a profit of $400. But these are based upon unadjusted amounts. There are several expenses such as rent, supplies, depreciation, furniture and fixtures, interest on the borrowing and wages. The company does not seem to be profitable, as this situation is very common in small businesses during the inception of the operations. The company must focus on increasing revenues and while maintaining the expenses that should result in the upcoming years. The company should prepare budgeted cash flows for each month in the upcoming years that would help the management to handle the probable cash shortages.

Regards,

XYZ

5.

To determine

Compute the net profit margin ratio for each year and explain the reason for promoting the manager.

5.

Expert Solution
Check Mark

Explanation of Solution

Compute the net profit margin ratio:

Net profit margin ratio for 2021:

Net profit margin ratio=Net incomeNet sales revenue=$22,000$93,500=0.235

Hence, the net profit margin ratio for the year 2021 is 0.235.

Net profit margin ratio for 2020:

Net profit margin ratio=Net incomeNet sales revenue=$11,000$82,500=0.133

Hence, the net profit margin ratio for the year 2020 is 0.133.

Net profit margin ratio for 2019:

Net profit margin ratio=Net incomeNet sales revenue=$4,400$55,000=0.080

Hence, the net profit margin ratio for the year 2019 is 0.080.

  • By evaluating the net profit margin ratio, it is clear that the profit level of the Company has increased.
  • This states that the company is very efficient in generating the revenue from the sales and controlling the expenses.
  • Based on this the reasons, the company should promote its manager to the next level.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Chapter 3 Solutions

Connect Access Card For Financial Accounting

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
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY