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QUESTION 1 The following is a summary of transactions for January 20xx, gathered by the Sample Cafe bookkeeper. Sample Cafe Transactions Item Notes 7,300 medium cup of coffee sold at $3.00 each Includes 400 medium cups medium cups sold to the college and delivered to a reception that has been invoiced, but not yet paid 4.000 largo cups of coffee sold at $4.00 each Espresso maker purchased inst year for $12,000 5-year life $480 premium for business Insurance Premium for full year $3,800 for rent Includes $2.200 in Fort deposits $2,100 for coffee beans Includes coffee discarded valued at $100 $1,000 for coffee cups $14,600 to employees for payroll $200 of interest on loan Ocups in Inventory at the beginning of January 5700 worth of cups still in inventory at the end of month $2,800 owed in payroll taxes Paid mid-month $1,100 for electricity and water Includes $600 in utility deposits $12.800 in advertising $3,200 per week billed monthly Now use the transaction Information to create a Accrual-Based Income Statement for January using the following template. Acount Balance Revenues $0 Cost of Goods Sold $0 Gross Margin, or Gross Profit $0 Expenses Salaries and Wages $0 Rent and Utilities $0 Advertising SO Insurance $0 Equipment Depreciation $0 Interest $0 Total Expenses $0 Net Income 0 Use the preceding transaction information to create a Cash-Based Income Statement for January using the following template. Account Balance Revenues SO Expenses Coffee and Cups SO Salaries and Wages 0 Rent and Utilities $0 Advertising 0 Insurance Equipment 0 Interest $0 Other Expenses 0 Total Expenses Net Income What is the gross margin percent for Sample Cafe? Answer 0 96 Show your work or leave a comment QUESTION 4 For each cup of coffee sold, what is the average contribution margin? Answer 0.00 QUESTION 5 What are salaries and wages as a percent of revenue? Answer QUESTION 6 What is the net income as a percent of revenue? Answer 0.0 % Show your work or leave a comment QUESTION 7 1 Sample Cafe had given employees a 10% raise at the beginning of January, what would net income have been presuming taxes increase at the same rate as wage Answer 0 Show your work or leave a comment QUESTIONS Which of the following statements are true based on the differences between the two accounting approaches used in January The cash based system understated revenues relative to what was actually sold. Cash received from sales was less than revenues on the income statement using the accrual based system. Cash flows were more accurately represented using the accrual-baned system U The monthly cost of having an espresso machine was more accurately represented using the accrual-based system
