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CP3-3 (Algo) Analyzing the Effects of Transactions Using T-Accounts, Preparing an Unadjusted Trial Balance, and Determining Net Income and Net Profit Margin (LO 3-1, LO

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CP3-3 (Algo) Analyzing the Effects of Transactions Using T-Accounts, Preparing an Unadjusted Trial Balance, and Determining Net Income and Net Profit Margin (LO 3-1, LO 3-2, LO 3-3, LO 3-4, LO 3-5) Barbara Jones opened Barb's Book Business on February 1. You have been hired to maintain the company's financial records. The following transactions occurred in February, the first month of operations. a. Received shareholders' cash contributions on February 1 totaling $20,000 to form the corporation, issued 1,000 shares of com common stock b. Pald $2,565 cash on February 2 for three months' rent for office space. TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Rent). At the end of the month, this account will be adjusted to its proper balance. c. Purchased and received supplies on February 3 for $625 cash. d. Signed a promissory note on February 4, payable in two years; deposited $19,900 in the company's bank account e On February 5, paid cash to buy equipment for $7700 and land for $12,200. Placed an advertisement in the local paper on February 6 for $415 cash. 9. Recorded sales on February 7 totaling $2,100; $1,650 was in cash and the rest on accounts receivable. h. Collected accounts receivable of $52 from customers on February 8. On February 9, repaired one of the computers for $138 cash. TIP: Most repairs involve costs that do not provide additional future economic benefits. J. Incurred and paid employee wages on February 28 of $675. Required: 1. Prepare the journal entry for each of the above transactions. 2. Post the transaction activity from requirement 1 to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations. 3. Prepare an unadjusted trial balance at the end of February 4-a. Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information, calculate preliminary net 4-6. Determine whether the net profit margin is better or worse than the 15 percent earned by a close competitor, View transaction list Journal entry worksheet Received shareholders' cash contributions on February 1 totaling $20,000 to form the corporation; issued 1,000 shares of common stock. Record the transaction. Note: Enter debits before credits Transaction General Journal (a) Cash Debit Credit Common Stock Record entry Clear entry View general journal Raq 1 Req 2 > View transaction list Journal entry worksheet Paid $2,565 cash on February 2 for three months' rent for office space. Record the transaction. Note: Enter debits before credits. Transaction (b) General Journal Debit Credit Record entry Clear entry View general Journal Reg 1 Req 2 > View transaction list Journal entry worksheet Purchased and received supplies on February 3 for $625 cash. Record the transaction. Note: Enter debits before credits Transaction (c) General Journal Debit Credit Record entry Clear entry View general Journal Journal entry worksheet Signed a promissory note on February 4, payable in two years; deposited $19,900 in the company's bank account. Record the transaction. Note: Enter debits before credits. Transaction General Journal Debit Credit (d) Record entry Clear entry View general journal Regt Req 2 > Journal entry worksheet 1 2 3 4 5 6 7 8 9 10 > On February 5, paid cash to buy equipment for $7,700 and land for $12,200. Record the transaction. Note: Enter debits before credits. Transaction General Journal Debit Credit (e) Record entry Clear entry View general Journal Reg 1 Req 2 > Journal entry worksheet Placed an advertisement in the local paper on February 6 for $415 cash. Record the transaction. Note: Enter debits before credits. Transaction General Journal Debit Credit (0 Record entry Clear entry View general journal Req1 Req 2 > View transaction list Journal entry worksheet Recorded sales on February 7 totaling $2,100; $1,650 was in cash and the rest on accounts receivable. Record the transaction. Note: Enter debits before credits Transaction (9) General Journal Debit Credit Record entry Clear entry View general Journal Reg1 Req2 > View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 9 10 > Collected accounts receivable of $52 from customers on February 8. Record the transaction. Note: Enter debits before credits. Transaction (h) General Journal Debit Credit Record entry Clear entry View general Journal Reg 1 Req 2 > View transaction list Journal entry worksheet View transaction ist Journal entry worksheet Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Req 4A Reg 4B Post the transaction activity from requirement 1 to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations, Cash Accounts Receivable Debit Beginning Balance Credit Credit Debit Beginning Balance Ending Balance Ending Balance Supplies Prepaid Rent Debit Beginning Balance Credit Credit Debit Beginning Balance Ending Balance Ending Balance Land Equipment Credit Credit Debit Beginning Balance Debit Beginning Balance Ending Balance Ending Balance Notes Payable (long-term) Common Stock Credit Debit Credit Debit Beginning Balance Beginning Balance Ending Balance 0 Ending Balance Sales Revenue Advertising Expense Credit Credit Debit Beginning Balance Debit Beginning Balance Ending Balance 0 Ending Balance Salaries and Wages Expense Debit Credit Beginning Balance Repairs & Maintenance Expense Debit Credit Beginning Balance Ending Balance 0 Ending Balance 0 ( Req1 Req3 > Reg 1 Req 2 Req3 Req 4A Req 4B Prepare an unadjusted trial balance at the end of February. BARB'S BOOK BUSINESS Unadjusted Trial Balance Account Name Debit Credit Cash Accounts Receivable Supplies Prepaid Rent Land Equipment Notes Payable (long-term) Common Stock Sales Revenue Advertising Expense Salaries and Wages Expense Repairs and Maintenance Expense Total $ 0 $ 0 Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3 Req 4A Req 48 Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information, calculate preliminary net income and net profit margin? (Round your Net Profit Margin answer to 1 decimal place.). Preliminary Net Income Net Profit Margin %

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