E3-10

Cash Rebuilding Fee Revenue

beg. 6,400 0
a. 19,000 2,300 g. 19,000
b. 600 16,500 i.
c. 850 2,200 j.
d. 7,200 960 k.

Accounts receivable Unearned revenue

Beg. 32,000 3,840
7,200 d. 600

Long-term note payable Equipment

48,500 Beg. Beg. 9,500
h. 920

Land Additional paid-in capital

Beg. 7,400 7,000
820

Retained earnings Rent revenue

11,560 Beg. 0
j. 2,200 850

Utilties expense
Beg. 0
e. 400

3
Revenue $19,850 - Expense $16,900 = Net Income $2950
Assets $82,470 = Liabilities $60,640 + Stakeholders' Equity $18,880

4
net income = 19000+600+750+7200-2300-16500-960 = 7,790
it is much larger than the accural basis net income.
 e Revenue Accounts payable
beg. 9,600 Beg.
a. g. 2,300 400 e.
k. 960 960 f.

evenue Supplies
Beg. Beg. 1,500
b. f. 960

ment Common stock

1,600 Beg.
100 h.

d-in capital Building

Beg. Beg. 25,300
h.

enue Wage expense

Beg. Beg. 0
c. i. 16,500
P3-1

Transaction Debit Credit

a. 5 1,8
b. 15 1
c. 7 1
d. 4 1
e. 2 14
f. 1 2
g. 1 11,(12)
h. 15 1
i. 15 7
j. 6 1
k. 1 14
l. none none
m. 16 10,1
n. 8,17 1
o. 4 1
P3-4

Cash Accounts payable

Beg. 0 0 Beg.
a. 30200 5250 b. i. 550 6000 c.
e. 11000 1560 d. 5450 End
h. 2675 2750 f.
k. 600 400 g.
m. 1200 1600 h.
550 i.
1300 j.
400 l.
600 m.
End 31265

Account receivables Notes payable

Beg. 0 0 Beg.
h. 825 600 k. 11000 e.
End 225 11000 End

Supplies Common stock

Beg. 0 0 Beg.
d. 1560 40 a.
End 1560 40 End

Inventory Additional paid-in capital

Beg. 0 0 Beg.
c. 6000 30160 a.
End 6000 30160 End

Prepaid expense Sales revenue

Beg. 0 0 Beg.
b. 5250 3500 h.
End 5250 1200 m.
4700 End

Equipment Cost of good sold (expense)

Beg. 0 Beg. 0
End 0 h. 1600
 m. 600
End 2200

Furniture and fixtures Advertising Expense

Beg. 0 Beg. 0
f. 2750 g. 400
End 2750 End 400

Repair Expense Wage Expense

Beg. 0 Beg. 0
l. 400 j. 1300
End 400 End 1300

Kaylee's Sweets
Income Statement
For the Month ended February 28, current year
Revenue
Sale revenue $ 4,700
4,700
Expenses
Cost of good sold 2,200
Advertising expense 400
Wage expense 1,300
Repair expense 400
Total expenses 4,300
Net earning 400

2018 2017 2016

net profit margin ratio 0.2352941 0.1333333 0.08

From the growth of net profit margin ratio in the three years, the business of Kaylee's sweets is
shown to have higher and higher profit rate. It implies that the sales and expenses of the business
becomes more and more effectively managed.
So, yes I think I should be promoted.
P3-7

Transaction Debit Credit

a. cash (+A) $ 596,042
Service revenue (+R, +SE) 596,042
b. Primary operating expenses (+E, -SE) 433,416
cash (-A) 401,630
wages payable (+L) 31,786
c. Long-term noted payable (-L) 47,100
cash (-A) 47,100
d. cash (+A) 365,693
Merchandise revenue (+R, +SE) 365,693
cost of good sold (+E, -SE) 92,057
inventories (-A) 92,057
e. Facilities and equipment (+A) 90,190
cash (-A) 90,190
f. cash (+A) 81,855
account receivable (+A) 1,089
accomodation revenue (+R, +SE) 82,944
g. interest expense (+E,-SE) 153,326
cash (-A) 153,326
h. inventories (+A) 147,531
cash (-A) 119,431
account payable (+L) 28,100
i. advertising expense (+E, -SE) 140,426
cash (-A) 134,044
account payable (+L) 6,382
j. account payable (-L) 11,600
cash (-A) 11,600

transaction operating, investing, or financing effect direction & ampunt of the effect(in thousands)
(a) O +596,042
(b) O -401,630
(c) F -47,100
(d) O +273,636
(e ) I -90,190
(f) O +81,855
(g) F -153,326
(h) O -147,531
(i) O -134,044
(j) O -11,600
 effect(in thousands)
+596,042
-401,630
-47,100
+273,636
-90,190
+81,855
-153,326
-147,531
-134,044
-11,600