【正文】 0(b)360,000(k) 20,000 0 Beg.420 (g)68,300380,000420Note PayableMortgage Payable 0 Beg.50,000 (c) 0 Beg.288,000(b)50,000288,000Common StockAdditional Paidin CapitalRetainedEarnings 0 Beg.1,000 (a) 0 Beg.180,500 (a)(j) 6000 Beg.1,000180,500600Food Sales RevenueCatering Sales Revenue 0 Beg.11,900 (f) 0 Beg.4,200 (e)11,9004,200Supplies ExpenseUtilities ExpenseWages ExpenseBeg. 0(d) 10,830Beg. 0(g) 420Beg. 0(i) 6,28010,8304206,280Fuel ExpenseBeg. 0(h) 363363E3–14.Req. 1TRAVELING GOURMET, INC.Ine Statement (unadjusted)For the Month Ended March 31, 2014Revenues: Food sales revenue Catering sales revenue Total revenuesExpenses: Supplies expense Utilities expense Wages expense Fuel expense Total costs and expenses$ 11,900 4,200 16,100 10,8304206,280 363 17,893Net Loss$ (1,793)Req. 2TransactionO, I, or F Activity (or No Effect) on Statement of Cash FlowsDirection and Amount of Effecta.F+160,000b.I72,000c.F+50,000d.O10,830e.O+2,600f.O+11,900g.NENEh.O363i.O6,280j.F600k.I70,000 Req. 3The pany generated a small loss of 1,793 during its first month of operations, before making any adjusting entries. The adjusting entries for use of the building and equipment and interest expense on the borrowing will increase the loss. Cash flows from operating activities were also negative at $2,973 (= + 11,900 + 2,600 – 10,830 – 363 – 6,280) . So far the pany does not appear to be successful, but it is only in its first month of operating a retail store. If sales can be increased without inflating fixed costs (particularly salaries expense), the pany may soon turn a profit. It is not unusual for small businesses to report a loss or have negative cash flows from operations as they start up operations.E3–15.Req. 1TransactionBrief ExplanationaIssued 10,000 shares of mon stock to shareholders for $82,000 cash. bPurchased store fixtures for $15,400 cash.cPurchased $24,800 of inventory, paying $6,200 cash and the balance on account.dSold $14,000 of goods or services to customers, receiving $9,820 cash and the balance on account. The cost of the goods sold was $7,000.eUsed $1,480 of utilities during the month, not yet paid.fPaid $1,300 in wages to employees.gPaid $2,480 in cash for rent, $620 related to the current month and $1,860 related to future months.hReceived $3,960 cash from customers, $1,450 related to current sales and $2,510 related to goods or services to be provided in the future.Req. 2Kate’s Kite CompanyIne StatementFor the Month Ended April 30, 2014Sales RevenueExpenses: Cost of sales Wages expense Rent expense Utilities expense Total expenses$ 15,450 7,0001,300620 1,480 10,400Net Ine$ 5,050E3–15. (continued)Kate’s Kite CompanyBalance SheetAt April 30, 2014AssetsLiabilities and Shareholders’ EquityCurrent Assets:Current Liabilities:Cash$70,400Accounts payable$20,080Accounts receivable4,180Unearned revenue2,510Inventory17,800 Total current liabilities22,590Prepaid expenses1,860Shareholders’ Equity: Total current assets94,240Common stock10,000Store fixtures15,400Additional paidin capital72,000Retained earnings5,050 Total shareholders’ equity87,050Total Assets$109,640Total Liabilities amp。 equity). Stockholders39。 equity). Stockholders39。 equity). Stockholders39。 equity). Stockholders39。 equity). Stockholders39。 earnings process is not yet plete.j.Ticket sales revenue $3,900,000 (= $19,500,000 247。 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。 cash collections in July related to earnings in June.d.NoneNo revenue earned in July。Chapter 03 Operating Decisions and the Accounting SystemChapter 3Operating Decisions and the Accounting SystemANSWERS TO QUESTIONS1. A typical business operating cycle for a manufacturer would be as follows: inventory is purchased, cash is paid to suppliers, the product is manufactured and sold on credit, and the cash is collected from the customer.2. The time period assumption means that the financial condition and performance of a business can be reported periodically, usually every month, quarter, or year, even though the life of the business is much longer.3. Net Ine = Revenues + Gains Expenses Losses. Each element is defined as follows:Revenues increases in assets or settlements of liabilities from ongoing operations.Gains increases in assets or settlements of liabilities from peripheral transactions.Expenses decreases in assets or increases in liabilities from ongoing operations.Losses decreases in assets or increases in liabilities from peripheral transactions. 4. Both revenues and gains are inflows of net assets. However, revenues occur in the normal course of operations, whereas gains occur from transactions peripheral to the central activities of the pany. An example is selling land at a price above cost (at a gain) for panies not in the business of selling land. Both expenses and losses are outflows of net assets. However, expenses occur in the normal course of operations, whereas losses occur from transactions peripheral to the central activities