Problem 4

Massa Company provides marketing consulting services worldwide for dot-com companies. At the start of 2022, Massa's T-account balances were as follows:

Cash			Accounts Receivable			LT Investments
12,800			32,000			25,600
Accounts Payable			Unearned Revenue			LT Notes Payable
	9,600			22,400			6,400
Common Stock ($0.20 par)			Additional Paid-in-Capital			Retained Earnings
	3,200			16,000			12,800
Consulting Fee Revenue			Investment Income			Wages Expense
Travel Expense			Utilities Expense			Rent Expense

Questions:

Q1 (14 Points, 2 Points each): Enter the following 2022 transactions in the T-accounts:

a. Provided $232,000 in services to clients who paid $192,000 in cash and owed the rest on account.

b. Received $22,400 cash from clients on account.

c. Received $1,600 in cash as income on investments.

d. Paid $144,000 in wages, $48,000 in travel, $30,400 in rent, and $6,400 on accounts payable.

e. Received $6,400 in cash from clients in advance of services Massa will provide next year.

f. Received a utility bill for $3,200 for 2022 services to be paid in 2023.

g. Paid $1,920 in dividends to stockholders.

Q2 (6 Points, 1 Points each): Compute ending balances in the T-accounts to determine amounts for the following on December 31, 2022:

Revenue $_______________ - Expenses $_____________ = Net Income_____________

Assets $___________ = Liabilities $_____________ + Stockholders Equity $____________

Q3 (6 Points): Calculate (1) the current ratio at the end of 2022 and (2) the net profit margin ratio for 2022. (Round your answer to 4 decimal places.)