The questions come from the income statement above.

Item Notes 8,300 medium cups of coffee sold at $3.00 each Includes 500 medium cups medium cups sold to the college and delivered to a reception that has been invoiced, but not yet paid. 4,400 large cups of coffee sold at $4.00 each Espresso maker purchased last year for $12,600 5-year life $480 premium for business insurance Premium for full year $3,300 for rent Includes $2,100 in rent deposits. $2,400 for coffee beans Includes coffee discarded valued at $100 $1,700 for coffee cups O cups in inventory at the beginning of January. $600 worth of cups still in inventory at the end of month. $15,300 to employees for payroll $2,400 owed in payroll taxes $300 of interest on loan Paid mid-month $900 for electricity and water Includes $500 in utility deposits $13,200 in advertising $3,300 per week billed monthly Now use the transaction information to create a Accrual-Based Income Statement for January using the following template. Account Balance Revenues Cost of Goods Sold $ o Gross Margin, or Gross Profit Expenses Salaries and Wages Rent and Utilities Revenues $ 0 Cost of Goods Sold $0 Gross Margin, or Gross Profit $ 0 Expenses Salaries and Wages $ 0 Rent and Utilities $ 0 Advertising $ 0 Insurance $ 0 Equipment Depreciation $ 0 Interest $ 0 Total Expenses $ $ 0 Net Income $ 0 Use the Accrual-Based Income Statement you created above to answer the following questions. QUESTION 3 What is the gross margin percent for Sample Cafe? Answer 0 % 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 0 % QUESTION 6 What is the net income as a percent of revenue? Answer 0.0 % QUESTION 7 If 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 wages? Answer 0 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-based system The monthly cost of having an espresso machine was more accurately represented using the accrual-based system. Net income is always higher using an accrual accounting system Item Notes 8,300 medium cups of coffee sold at $3.00 each Includes 500 medium cups medium cups sold to the college and delivered to a reception that has been invoiced, but not yet paid. 4,400 large cups of coffee sold at $4.00 each Espresso maker purchased last year for $12,600 5-year life $480 premium for business insurance Premium for full year $3,300 for rent Includes $2,100 in rent deposits. $2,400 for coffee beans Includes coffee discarded valued at $100 $1,700 for coffee cups O cups in inventory at the beginning of January. $600 worth of cups still in inventory at the end of month. $15,300 to employees for payroll $2,400 owed in payroll taxes $300 of interest on loan Paid mid-month $900 for electricity and water Includes $500 in utility deposits $13,200 in advertising $3,300 per week billed monthly Now use the transaction information to create a Accrual-Based Income Statement for January using the following template. Account Balance Revenues Cost of Goods Sold $ o Gross Margin, or Gross Profit Expenses Salaries and Wages Rent and Utilities Revenues $ 0 Cost of Goods Sold $0 Gross Margin, or Gross Profit $ 0 Expenses Salaries and Wages $ 0 Rent and Utilities $ 0 Advertising $ 0 Insurance $ 0 Equipment Depreciation $ 0 Interest $ 0 Total Expenses $ $ 0 Net Income $ 0 Use the Accrual-Based Income Statement you created above to answer the following questions. QUESTION 3 What is the gross margin percent for Sample Cafe? Answer 0 % 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 0 % QUESTION 6 What is the net income as a percent of revenue? Answer 0.0 % QUESTION 7 If 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 wages? Answer 0 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-based system The monthly cost of having an espresso machine was more accurately represented using the accrual-based system. Net income is always higher using an accrual accounting system