【正文】 300Net Ine$11,100 Net Ine$7,800M3–3.Revenue Account Affected Amount of Revenue Earned in Julya.Games Revenue $15,000b.Sales Revenue $8,000c.NoneNo revenue earned in July。 cash collections in July related to earnings in June.d.NoneNo revenue earned in July。 earnings process is not yet plete – Unearned Revenue is recorded upon receipt of cash.M3–4.Expense Account Affected Amount of Expense Incurred in Julye.Cost of Goods Sold $6,800f.NoneNo expense is incurred in July。 payment related to June electricity usage.g.Wages Expense $3,500h.Insurance Expense $500 incurred and expensed in July and $1,000 not incurred until future months (recorded as Prepaid Expense (A)).i.Repairs Expense $700j.Utilities Expense $900 M3–5.a.Cash (+A) 15,000Games Revenue (+R, +SE) 15,000b.Cash (+A) 3,000Accounts Receivable (+A) 5,000Sales Revenue (+R, +SE) 8,000c.Cash (+A) 4,000Accounts Receivable (A) 4,000d.Cash (+A) 2,500Unearned Revenue (+L) 2,500M3–6.e.Cost of Goods Sold (+E, SE) 6,800Inventory (A) 6,800f.Accounts Payable (–L) 800Cash (A) 800g.Wages Expense (+E, SE) 3,500Cash (A) 3,500h.Insurance Expense (+E, SE) 500Prepaid Expenses (+A) 1,00Cash (A) 1,500i.Repairs Expense (+E, SE) 700Cash (A) 700j.Utilities Expense (+E, SE) 900Accounts Payable (+L) 900M3–7.Balance SheetIne StatementAssetsLiabilitiesStockholders’ EquityRevenuesExpensesNet Inea.+15,000NE+15,000+15,000NE+15,000b.+8,000NE+8,000+8,000NE+8,000c.+4,000–4,000NENENENENEd.+2,500+2,500NENENENETransaction (c) results in an increase in an asset (cash) and a decrease in an asset (accounts receivable). Therefore, there is no net effect on assets.M3–8.Balance SheetIne StatementAssetsLiabilitiesStockholders’ EquityRevenuesExpensesNet Inee.–6,800NE–6,800NE+6,800–6,800f.–800–800NENENENEg.–3,500NE–3,500NE+3,500–3,500h.–1,500+1,000NE–500NE+500–500i.–700NE–700NE+700–700j.NE+900–900NE+900–900Transaction (h) results in an increase in an asset (prepaid expenses) and a decrease in an asset (cash). Therefore, the net effect on assets is 500.M3–9.Craig’s Bowling, Inc.Ine StatementFor the Month of July 2014Revenues:Games revenue$15,000Sales revenue8,000Total revenues23,000Expenses:Cost of goods sold6,800Utilities expense900Wages expense3,500Insurance expense500Repairs expense700Total expenses 12,400Net ine$ 10,600M3–10.TransactionO, I, or F Activity (or No Effect) on Statement of Cash FlowsDirection and Amount of Effecta.O+15,000b.O+3,000c.O+4,000d.O+2,500e.NENEf.O800g.O3,500h.O1,500i.O700j.NENEM3–11.Net Ine247。Net Sales Revenue=Net Profit Margin Ratio2015$51,000$163,000 or %2014 40,000 151,000 or %2013 25,000 132,000 or %These results suggest that Jen’s Jewelry Company earned approximately $ for every dollar of revenue in 2015, and over time, the ratio has improved. Jen’s has bee more effective at managing sales and expenses.As additional analysis:Percentage Change in Net InePercentage Change in Net Sales RevenueFrom 2014 to 2015($51,000 $40,000) / $40,000+%($163,000 $151,000) / $151,000+%From 2013 to 2014($40,000 $25,000) / $25,000+%($151,000 $132,000) / $132,000+%Between 2013 to 2014 and 2014 to 2015, sales have increased at a lower percentage than net ine. This suggests that the pany has been more effective at controlling expenses than generating revenues.EXERCISESE3–1. TERMK (1) ExpensesE (2) GainsG (3) Revenue realization principleI (4) Cash basis accountingM (5) Unearned revenueC (6) Operating cycleD (7) Accrual basis accountingF (8) Prepaid expensesJ (9) Revenues Expenses = Net IneL(10) Ending Retained Earnings = Beginning Retained Earnings + Net Ine Dividends DeclaredE3–2. Req. 1Cash Basis Ine StatementAccrual Basis Ine StatementRevenues: Cash sales Customer deposits $500,00070,000 Revenues: Sales to customers $750,000Expenses: INVENTORY PURCHASES WAGES PAID UTILITIES PAID 90,000180,30017,200 Expenses: COST OF SALES WAGES EXPENSE UTILITIES EXPENSE 485,000184,00019,130Net Ine$282,500 Net Ine$61,870Req. 2Accrual basis financial statements provide more useful information to external users. Financial statements created under cash basis accounting normally postpone (., $250,000 credit sales) or accelerate (., $70,000 customer deposits) recognition of revenues and expenses long before or after goods and services are produced and delivered (until cash is received or paid). They also do not necessarily reflect all assets or liabilities of a pany on a particular date. E3–3. ActivityRevenue Account Affected Amount of Revenue Earned in Septembera.None No revenue earned in September。 earnings process is not yet plete.b.Interest revenue $ (= $1,500 x 10% x 1 month/12 months)c.Sales revenue $19,500d.NoneNo transaction has occurred。 exchange of promises only.e.Sales revenue $15,000 (= 1,000 shirts x $15 per shirt)Revenue earned when goods are delivered.f.NonePayment related to revenue recorded previously in (