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 2024 (its fourth year), Massa’s account balances were as follows. Dollars are in thousands.

Required:
1. Using the data from this list, amounts for the following on January 1, 2024, were
Assets $ _____ = Liabilities $ _____ + Stockholders’ Equity $ _____

2. Create T-accounts and start with the list above as beginning balances. Then, enter in the T-accounts the following transactions for 2024:
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 2024 services.
g. Declared and immediately paid $480 in dividends to stockholders.
3. Compute ending balances in the T-accounts to determine amounts for the following on December 31, 2024:
Revenues $ _____ − Expenses $ _____ = Net Income $ _____
Assets $ _____ = Liabilities $ _____ + Stockholders’ Equity $ _____
4. Calculate the net profit margin ratio for 2024. If the company had a net profit margin ratio of 2.9 percent in 2023 and 2.5 percent in 2022, what does your computation suggest to you about Massa Company? What would you say in your report?

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Accounts payable Accounts receivable Additional paid-in capital Cash Common stock ($0.10 par value) Consulting fee revenue Interest revenue $2,400 8,000 4,000 3,200 800 0 0 Long-term investments Long-term notes payable Rent expense Retained earnings Travel expense Wages expense Unearned revenue Utilities expense $6,400 1,600 0 3,200 0 0 5,600 0