FINANCIAL ACCOUNTING (LOOSELEAF)
FINANCIAL ACCOUNTING (LOOSELEAF)
10th Edition
ISBN: 9781260481358
Author: Libby
Publisher: MCG
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 3, Problem 6P

1.

To determine

Journalize the given transactions.

1.

Expert Solution
Check Mark

Explanation of Solution

Journalize the given transactions:

DateAccount Title and ExplanationDebit ($)Credit ($)
aCash (+A)$1,390  
Receivables (+A)$24,704  
 Delivery Service revenue (+SE, +R) $26,094
 (To record the sales)  
 
bProperty and equipment (+A)$3,434  
Long-term notes payable (+L) $3,434
 (To record the long-term notes payable)  
 
 c Rent expense (+E) (-SE)$3,136  
Prepaid rent (+A)$4,728  
 Cash (-A) $7,864
 (To record the rent expense and prepaid rent)  
 
dRepairs expense (+E) (-SE)$864  
Cash (-A) $864
 (To record the expenses paid)  
 
eCash (+A)$24,285  
Receivable (-A) $24,285
 (To record the receivables collected)  
 
fLong-term notes payable (-L)$150  
Cash (-A) $150
 (To record the payment of long-term notes payable)  
 
gCash (+A) $16  
Common Stock (+SE) $2
Additional paid-in-capital (+SE) $14
 (To record the receipt of stock)  
 
hWages (+E) (-SE)$9,276  
Cash (-A) $9,276
 (To record the wages paid)  
 
iSpare parts, supplies, and fuel (+A) $6,564  
Cash (-A) $6,564
 (To record the sales revenues)  
 
jSpare parts, supplies, and fuel expense (+E) (-SE)$6,450  
Spare parts, supplies, and fuel (-A) $6,450
 (To record the sales revenues)  
 
kAccounts payable (-L)$784  
Cash (-A) $784
 (To record the sales revenues)  
 
lNo entry  

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:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  1

Receivables account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  2

Spare parts, supplies and fuel account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  3

Prepaid expenses account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  4

Other current asset account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  5

Property and equipment account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  6

Other non-current asset account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  7

Accounts payable account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  8

Accrued expenses payable account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  9

Other current liabilities account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  10

Long-term note payable account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  11

Other non-current liabilities account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  12

Common stock account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  13

Additional paid-in capital account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  14

Retained earnings account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  15

Delivery service revenue account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  16

Aircraft rental expense account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  17

Maintenance and repair expense account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  18

Wage expense account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  19

Fuel expense account:

FINANCIAL ACCOUNTING (LOOSELEAF), Chapter 3, Problem 6P , additional homework tip  20

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

3.

To determine

Prepare an income statement for the month May.

3.

Expert Solution
Check Mark

Explanation of Solution

Prepare an income statement:

Company F
Income statement (Unadjusted)
For the year ended May 31 (in millions)
ParticularsAmount ($)Amount ($)
Revenues:  
Delivery service revenue26,094  
Total revenues (A) 26,094
Expenses:  
Rental expense3,136 
Fuel expense9,276 
Wage expense6,450 
Repair expense864 
Total expenses (B) 19,726
Net Income (AB) $6,368

Table (2)

Hence, the net income of Company F is $6,368 million.

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=$6,368$26,094=0.24

Hence, the net profit margin ratio is 0.24.

Suggestion:

  • By evaluating the net profit margin ratio, the company has earned $0.24 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.

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

FINANCIAL ACCOUNTING (LOOSELEAF)

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
Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License