【正文】 equity and assets increase by the same amount.h. Cash (+A) 3,500 Unearned rent revenue (+L) 3,500Debits equal credits. Since the rent is received before the townhouse is used, revenue is deferred until it is earned. Assets and liabilities increase by the same amount.i. Accounts payable (L) 17,500 Cash (A) 17,500 Debits equal credits. Assets and liabilities decrease by the same amount.j. Cash (+A) 400 Accounts receivable (A) 400 Debits equal credits. Assets increase and decrease by the same amount.k. Wages expense (+E, SE) 245,000 Cash (A) 245,000Debits equal credits. Expenses decrease retained earnings (a part of stockholders39。 equity and liabilities decrease by the same amount as assets.E3–8.Req. 1a. Cash (+A) 2,300,000 Shortterm note payable (+L) 2,300,000 Debits equal credits. Assets and liabilities increase by the same amount.b. Equipment (+A) 98,000 Cash (A) 98,000 Debits equal credits. Assets increase and decrease by the same amount.c. Merchandise inventory (+A) 35,000 Accounts payable (+L) 35,000 Debits equal credits. Assets and liabilities increase by the same amount. d. Repairs (or maintenance) expense (+E, SE) 62,000 Cash (A) 62,000Debits equal credits. Expenses decrease retained earnings (part of stockholders39。 12 months) The remaining amount is Prepaid Insurance.m.Repairs expense $600n.Utilities Expense $154o.Consulting Expense $2,034p.NoneDecember expense paid in January.q.Cost of goods sold $4500(= 450 shirts x $10 per shirt)E3–5.Balance SheetIne StatementAssetsLiabilitiesStockholders’ EquityRevenuesExpensesNet Inea.+NE+NENENEb.++NENENENEc.NENENENEd.+NE++NE+e.NE+–NE+–f.+NE++NE+g.––NENENENEh.–NE–NE+–i.+NE++NE+j.++NENENENEk.+ / –NENENENENEl.–NE–NE+ *–m.–+–NE+–n.–NE–NE+–Transaction (k) results in an increase in an asset (cash) and a decrease in an asset (accounts receivable). Therefore, there is no net effect on assets.* A loss affects net ine negatively, as do expenses. E3–6.Balance SheetIne StatementAssetsLiabilitiesStockholders’ EquityRevenuesExpensesNet Inea.+14,083NE+14,083NENENEb.+878,418+878,418NENENENEc.+11,000+11,000NENENENEd.+1,409,068–852,316NE NE+1,409,068 –852,316+1,409,068NENE+852,316+1,409,068 –852,316e.–22,737NE–22,737NENENEf.+/–19,397NENENENENEg.–289,901+96,633–386,534NE+386,534–386,534h.+370NE+370+370NE+370i.NE+1,395–1,395NE+1,395–1,395Transaction (f) results in an increase in an asset (property, plant, and equipment) and a decrease in an asset (cash). Therefore, there is no net effect on assets.E3–7.(in thousands)a.Plant and equipment (+A) 636 Cash (A) 636Debits equal credits. Assets increase and decrease by the same amount.b.Cash (+A) 181 Shortterm notes payable (+L) 181Debits equal credits. Assets and liabilities increase by the same amount.c.Cash (+A) Accounts receivable (+A) 10,76528,558 Service revenue (+R, +SE) 39,323Debits equal credits. Revenue increases retained earnings (part of stockholders39。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 September