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.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 5PB: Review the following transactions and prepare any necessary journal entries. A. On January 5, Bunnet...
Question

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.

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