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
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Chapter 3, Problem 6AP

1.

To determine

Journalize the given transactions.

1.

Expert Solution
Check Mark

Explanation of Solution

Journalize the given transactions:

DateAccount Title and ExplanationDebit ($)Credit ($)
aProperty and equipment (+A)$1,610  
Long-term notes payable (+L) $1,610
 (To record the long-term notes payable)  
 
bCash (+A)$3,100  
Accounts receivable (-A) $3,100
 (To record the receivables collected)  
 
 c Utilities expense (+E) (-SE)$3  
Cash (-A) $3
 (To record the expenses paid)  
 
dAccounts receivable (+A)$39,780  
Sales Revenue (+SE, +R) $39,780
 (To record the expenses paid)  
 
 Cost of Sales (+E) (-SE)$5,984  
 Inventory (-A) $5,984
 (To record the cost involved in sales)  
 
eWages (+E) (-SE)$1,238  
Cash (-A) $1,238
 (To record the wages paid)  
 
fIncome tax payable (-L)$9,545  
Cash (-A) $9,545
 (To record the income taxes paid)  
 
gInventory (+A) $23  
Accounts payable (+L) $23
 (To record the inventory purchased on account)  
 
hPrepaid expenses (+A) $82  
Cash (-A) $82
 (To record the expenses paid in advance)  
 
iOther long-term debt (-L)$10  
Interest expense$1  
Cash (-A) $11
 (To record the debt paid off)  
 
jOther assets and intangibles (+A) $6  
Cash (-A) $6
 (To record the purchase of other assets and intangibles)  

Table (1)

2

To determine

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

2

Expert Solution
Check Mark

Explanation of Solution

Prepare the T-accounts:

Cash account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  1

Short-term investments account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  2

Accounts receivables account:

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

Inventories account:

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

Prepaid expenses account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  5

Other current assets account:

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

Long-term investments account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  7

Other assets and intangibles account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  8

Property and equipment account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  9

Short-term notes payable account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  10

Accounts payable account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  11

Income taxes payable account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  12

Long-term note payable account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  13

Other long-term debt account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  14

Common stock account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  15

Retained earnings account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  16

Sales revenue account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  17

Cost of sales account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  18

Utilities expense account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  19

Interest expense account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  20

Wage expense account:

Connect Access Card For Financial Accounting, Chapter 3, Problem 6AP , additional homework tip  21

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

3.

To determine

Prepare an income statement for the month of January.

3.

Expert Solution
Check Mark

Explanation of Solution

Prepare an income statement:

Corporation EM
Income statement
For the month ended 31st January
ParticularsAmount ($)Amount ($)
Revenues:  
Sales revenue 39,780
Expenses:  
Cost of sales5,984 
Wage expense1,238 
Utilities expense3 
Total costs and expenses 7,225
Operating income 32,555
Less: Other expense  
Interest expense 1
Net Income $32,554

Table (2)

Hence, the net income of Company E is $32,554.

4.

To determine

Compute the net profit margin ratio and based on the result give suggestion to the company.

4.

Expert Solution
Check Mark

Explanation of Solution

Compute the net profit margin ratio:

Net profit margin ratio=Net incomeNet sales revenue=$32,554$39,780=0.8184

Hence, the net profit margin ratio is 0.82.

  • By evaluating the net profit margin ratio, the company has earned $0.82 in net income for every $ 1 in the sales revenue.
  • To know the better result about the company, net profit margin ratio should be calculated to identify the way in which the management is generating its revenue and controlling the various expenses.

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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
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