E3-18 (Static) Analyzing the Effects of Transactions Using T-Accounts and Interpreting the Net Profit Margin Ratio as a Financial Analyst LO3-4, 3-6 [The following information applies to the questions displayed below.] Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com companies. You are a financial analyst assigned to report on the Massa management team's effectiveness at managing its assets efficiently. At the start of 2019 (its fourth year), Massa's T-account balances were as follows. Dollars are in thousands. Assets Cash Accounts Receivable 3,200 8,000 Long-Term Investments 6,400 Liabilities Accounts Payable Unearned Revenue Long-Term Notes Payable Stockholders' Equity Common Stock ($0.10 par value) Additional Paid-in Capital Retained Earnings Revenues Consulting Fee Revenue Interest Revenue Expenses Wages Expense Travel Expense Utilities Expense Rent Expense Transactions for 2019: a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account. b. Received $5,600 cash from clients on account. c. Received $400 in cash as interest revenue on investments. d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable. e. Received $1,600 in cash from clients in advance of services Massa will provide next year. f. Received a utility bill for $800 for 2019 services. g. Declared and immediately paid $480 in dividends to stockholders. E3-18 Part 4 4. Calculate the net profit margin ratio for 2019. (Round your answer to 2 decimal places.) Net profit margin ratio % 2,400 1,600 800 3,200 5,600 4,000
E3-18 (Static) Analyzing the Effects of Transactions Using T-Accounts and Interpreting the Net Profit Margin Ratio as a Financial Analyst LO3-4, 3-6 [The following information applies to the questions displayed below.] Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com companies. You are a financial analyst assigned to report on the Massa management team's effectiveness at managing its assets efficiently. At the start of 2019 (its fourth year), Massa's T-account balances were as follows. Dollars are in thousands. Assets Cash Accounts Receivable 3,200 8,000 Long-Term Investments 6,400 Liabilities Accounts Payable Unearned Revenue Long-Term Notes Payable Stockholders' Equity Common Stock ($0.10 par value) Additional Paid-in Capital Retained Earnings Revenues Consulting Fee Revenue Interest Revenue Expenses Wages Expense Travel Expense Utilities Expense Rent Expense Transactions for 2019: a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account. b. Received $5,600 cash from clients on account. c. Received $400 in cash as interest revenue on investments. d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable. e. Received $1,600 in cash from clients in advance of services Massa will provide next year. f. Received a utility bill for $800 for 2019 services. g. Declared and immediately paid $480 in dividends to stockholders. E3-18 Part 4 4. Calculate the net profit margin ratio for 2019. (Round your answer to 2 decimal places.) Net profit margin ratio % 2,400 1,600 800 3,200 5,600 4,000
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter7: Receivables And Investments
Section: Chapter Questions
Problem 7.3AP
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How to calculate the net profit margin ratio?
![Required information
E3-18 (Static) Analyzing the Effects of Transactions Using T-Accounts and Interpreting the Net Profit
Margin Ratio as a Financial Analyst LO3-4, 3-6
[The following information applies to the questions displayed below.]
Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com
companies. You are a financial analyst assigned to report on the Massa management team's effectiveness at managing its
assets efficiently. At the start of 2019 (its fourth year), Massa's T-account balances were as follows. Dollars are in
thousands.
Assets
Cash
Accounts Receivable
3,200
8,000
Long-Term Investments
6,400
Liabilities
Accounts Payable
Unearned Revenue
Long-Term Notes Payable
Stockholders' Equity
Common Stock ($0.10 par value)
Additional Paid-in Capital
Retained Earnings
Revenues
Consulting Fee Revenue
Interest Revenue
Expenses
Wages Expense
Travel Expense
Utilities Expense
Rent Expense
Transactions for 2019:
a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account.
b. Received $5,600 cash from clients on account.
c. Received $400 in cash as interest revenue on investments.
d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable.
e. Received $1,600 in cash from clients in advance of services Massa will provide next year.
f. Received a utility bill for $800 for 2019 services.
g. Declared and immediately paid $480 in dividends to stockholders.
E3-18 Part 4
4. Calculate the net profit margin ratio for 2019. (Round your answer to 2 decimal places.)
Net profit margin ratio
%
2,400
1,600
800
3,200
5,600
4,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F266d5c88-4132-4eca-8561-6ebd3b0393f5%2Fee1b7785-f89b-4df5-b9d4-f0ab267d1d7d%2F9v5jc3c_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
E3-18 (Static) Analyzing the Effects of Transactions Using T-Accounts and Interpreting the Net Profit
Margin Ratio as a Financial Analyst LO3-4, 3-6
[The following information applies to the questions displayed below.]
Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com
companies. You are a financial analyst assigned to report on the Massa management team's effectiveness at managing its
assets efficiently. At the start of 2019 (its fourth year), Massa's T-account balances were as follows. Dollars are in
thousands.
Assets
Cash
Accounts Receivable
3,200
8,000
Long-Term Investments
6,400
Liabilities
Accounts Payable
Unearned Revenue
Long-Term Notes Payable
Stockholders' Equity
Common Stock ($0.10 par value)
Additional Paid-in Capital
Retained Earnings
Revenues
Consulting Fee Revenue
Interest Revenue
Expenses
Wages Expense
Travel Expense
Utilities Expense
Rent Expense
Transactions for 2019:
a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account.
b. Received $5,600 cash from clients on account.
c. Received $400 in cash as interest revenue on investments.
d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable.
e. Received $1,600 in cash from clients in advance of services Massa will provide next year.
f. Received a utility bill for $800 for 2019 services.
g. Declared and immediately paid $480 in dividends to stockholders.
E3-18 Part 4
4. Calculate the net profit margin ratio for 2019. (Round your answer to 2 decimal places.)
Net profit margin ratio
%
2,400
1,600
800
3,200
5,600
4,000
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