Financial Accounting, 9/e 3-41
P3–6. (continued)
Req. 3
FedEx
Income Statement (unadjusted)
For the Year Ended May 31 (current year)
(in millions)
Req. 4
Net Profit Margin Ratio
=
Net Income
=
$1,464
=
0.037 or 3.7%
Net Sales (or Operating)
Revenues
$39,304
The net profit margin ratio suggests that the company obtained nearly $0.04 in net
P3–7.
Req. 1
(in thousands)
Cash (+A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
596,042
Admissions revenue (+R, +SE). . . . . . . . . . . . . . . .
596,042
31,786
Cash (+A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
365,693
Sales revenue (+R, + SE) . . . . . . . . . . . . . . . . . . . . . .
365,693
92,057
92,057
Equipment (+A). . . . . . . . . . . . . . . . . . . . .
90,190
Cash (−A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
90,190
Cash (+A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable (+A). . . . . . . . . . . . . . . . . . . . . . . .
81,855
1,139
Accommodations revenue (+R, +SE). . . . . . . . . . . . .
82,994
147,531
28,100
Accounts payable (−L). . . . . . . . . . . . . . . . . . . . . . .
11,600
Cash (−A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,600
P3–7. (continued)
Req. 2
Transaction
Operating, Investing, or
Financing Cash Flows
Direction and Amount
of the Effect (in thousands)
(a)
O
+596,042
(b)
O
–401,630
(c)
F
–47,100
(d)
O
(e)
–90,190
O
+81,855
(g)
O
–153,326
(h)
O
–119,431
O
–134,044
O
–11,600
ALTERNATE PROBLEMS
AP3-1.
Transactions
Debit
Credit
a.
Example: Issued stock to new investors.
1
11, 12
b.
Incurred and recorded operating expenses on credit to
be paid next period.
15
7
f.
Purchased a building this period by making a 20 percent
cash down payment and signing a mortgage loan for the
balance.
5
1, 8
g.
Collected cash this year for services rendered and
recorded in the prior year.
1
2
Collected cash for services rendered this period.
1
14
i.
Paid cash this period for wages earned and recorded
last period.
9
1
j.
Paid cash for operating expenses charged on accounts
payable in the prior period.
7
1
Paid cash for operating expenses incurred in the current
15
1
l.
Made a payment on the mortgage loan, which was part
principal repayment and part interest.
8, 15
1
m.
issuance price.
Used supplies on hand to clean the offices.
15
3
o.
Recorded income taxes for this period to be paid at the
beginning of the next period.
16
10
Declared and paid a cash dividend this period.
13
1
This period a shareholder sold some shares of her stock
to another person for an amount above the original
Financial Accounting, 9/e 3-45
AP3–2.
a.
Accounts receivable (+A) …………………………………………….
23,500
Service revenue (+R, +SE) ………………………………….
23,500
e.
Advertising expense (+E, −SE) ……………………………………..
1,400
Cash (−A) …………………………………………………………
1,400
f.
Wages expense (+E, −SE) …………………………………………..
Wages payable (−L) ……………………………………………………
8,100
3,800
Cash (−A) …………………………………………………………
11,900
g.
Cash (+A) ………………………………………………………………….
Additional paid-in capital (+SE) …………………………...
h.
Cash (+A) ………………………………………………………………….
12,500
Accounts receivable (−A) …………………………………….
i.
Accounts receivable (+A) …………………………………………….
14,500
Service revenue (+R, +SE) ………………………………….
14,500
j.
Land (+A) ………………………………………………………………….
10,000
Cash (−A) …………………………………………………………
Note payable (+L) ………………………………………………
3,000
7,000
k.
Utilities expense (+E, −SE) …………………………………………..
1,950
Accounts payable (+L) ………………………………………..
1,950
b.
Accounts payable (−L) …………………………………………………
3,005
Cash (−A) …………………………………………………………
3,005
c.
Supplies (+A) ……………………………………………………………..
Accounts payable (+L) ………………………………………..
2,600
d.
Equipment (+A) ……………………………………………………….…
Cash (−A) …………………………………………………………
AP3–3.
Req. 1
Req. 2
Balance Sheet
Income Statement
Stmt of
Cash Flows
Assets
Liabilities
Stockholders’
Equity
Revenues
Expenses
Net
Income
a.
–
+
–
NE
+
–
O
b.
–
NE
–
NE
+
–
O
e.
+ / –
NE
NE
NE
NE
NE
O
f.
–
NE
–
NE
+
–
NE
g.
–
–
NE
NE
NE
NE
F
h.
NE
+
NE
O
–
–
NE
NE
NE
NE
O
NE
NE
NE
NE
F
–
NE
–
NE
+
–
O
Financial Accounting, 9/e 3-47
AP3–4.
Req. 1 and 2
Prepaid Insurance
Land
Barns
Beg. 0
(k) 3,600
Beg. 0
(a) 90,000
Beg. 0
(a)100,000
(b) 62,000
3,600
90,000
162,000
(h) 2,700
3,810 (f)
1,800 (l)
2,400 (e)
0 Beg.
31,000 (b)
2,910
31,000
Common
Stock
Additional Paid-in
Capital
0 Beg.
150 (a)
0 Beg.
261,850 (a)
150
261,850
35,260
13,200
Retained
Earnings
(m) 500
0 Beg.
500
Cash
(i) 10,000
3,600 (k)
500 (m)
AP3–4. (continued)
Req. 3
ALPINE STABLES, INC.
Income Statement (unadjusted)
For the Month Ended April 30, 2017
Revenues:
Animal care service revenue
$ 35,260
Net Income
$ 39,420
Req. 4
Date: (today’s date)
To: Shareholders of Alpine Stables, Inc.
From: (your name)
Financial Accounting, 9/e 3-49
AP3–4. (continued)
Req. 5
Net
Income
÷
Net Sales (or
Operating) Revenue
=
Net Profit Margin
Ratio
2019
$50,000
$450,000
0.1111 or 11.11%
AP3–5.
Transaction
Operating, Investing, or
Financing Cash Flows
Direction and Amount
of the Effect (in thousands)
(a)
F
+60,000
(b)
I
-31,000
(c)
NE
NE
(d)
O
+13,200
(e)
O
NE
NE
(g)
O
(h)
O
O
+10,000
O
(k)
O
NE
NE
F
2017
AP3–6.
Req. 1 and 2 (in millions)
Cash
Short-term Investments
Accounts Receivable
4,879
Beg. 12,664
3 (c)
Beg. 404
Beg. 38,642
Inventories
Prepaid Expenses
Other Current Assets
Beg. 11,665
(g) 23
5,984 (d)
Beg. 3,359
(h) 82
Beg. 6,229
5,704
3,441
6,229
9,098
58,700
3,812
9,322
Long-term
Notes Payable
Other
Long-Term Debt
Common
Stock
7,711 Beg.
(i) 10
83,481 Beg.
9,512 Beg.
7,711
83,471
9,512
Retained Earnings
Sales Revenue
Cost of Sales
151,232 Beg.
0 Beg.
Beg. 0
39,780 (d)
(d) 5,984
151,232
39,780
5,984
AP3–6. (continued)
Req. 3
Exxon Mobil Corporation
Income Statement (unadjusted)
For the Month Ended January 31
(in millions)
Revenues:
Sales revenue
$39,780
Req. 4
Net Income
$32,554
Net Sales (or Operating)
Revenue
$39,780
= 0.8184 or 81.84%
CONTINUING PROBLEM
CON3–1.
Req. 1
(a)
Advertising expense (+E, −SE) ……………………………………..
2,600
Cash (−A) ………………………………………………………..
2,600
Cash (+A) …………………………………………………………………..
Accounts receivable (+A) ……………………………………………..
Pool cleaning revenue (+R, +SE) …………………………
(c)
Accounts payable (−L) …………………………………………………
Cash (−A) ………………………………………………………..
Cash (+A) ………………………………………………………………….
Unearned revenue (+L) ………………………………………
(e)
Wages payable (−L) ……………………………………………………
1,500
Wages expense (+E, −SE ) ………………………………………….
3,000
Cash (−A) …………………………………………………………
4,500
(f)
Repairs expense (+E, −SE) ………………………………………….
310
Cash (−A) …………………………………………………………
310
Utilities expense (+E, −SE) …………………………………………..
220
Cash (−A) …………………………………………………………
220
Cash (+A) ………………………………………………………………….
Interest revenue (+R, +SE) …………………………………
Property tax expense (+E, −SE) ……………………………………
600
Property taxes payable (+L) ……………………………….
Prepaid expenses (+A) ………………………………………………..
Cash (−A) ………………………………………………………..
2,400
Financial Accounting, 9/e 3-53
CON3–1. (continued)
Req. 2
Penny’s Pool Service & Supply, Inc.
Income Statement (unadjusted)
For the Quarter Ended September 30
Pool cleaning revenue
Operating expenses:
Advertising expense
$19,200
2,600
Req. 3
Income before
Taxes
÷
Operating
Revenue
=
Net Profit Margin
Ratio
Quarter
ended 9/30
$12,545
$19,200
0.653 or 65.3%