【正文】 vided 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。 Net Sales (or Operating Revenues). The net profit margin ratio measures how much of every sales dollar is profit. An increasing ratio suggests that the pany is managing its sales and expenses effectively.ANSWERS TO MULTIPLE CHOICE 1. c 2. a 3. b 4. b 5. c 6. c 7. d 8. b 9. a10. bAuthors39。 5 games)k.NoneNo revenue earned in September。 equity and assets decrease by the same amount.E3–8. (continued)g. Cash (+A) 320,000 Lift revenue (+R, +SE) 320,000Debits equal credits. Revenue increases retained earnings (a part of stockholders39。 equity and assets decrease by the same amount.e. Cash (+A) 390,000 Unearned pass revenue (+L) 390,000Debits equal credits. Since the season passes are sold before Vail Resorts provides service, revenue is deferred until it is earned. Assets and liabilities increase by the same amount.f. Two transactions occur: (1) Accounts receivable (+A) 800 Ski shop sales revenue (+R, +SE) 800Debits equal credits. Revenue increases retained earnings (a part of stockholders39。 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 (e) above.g.NoneNo revenue earned in September。 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。 equity). Together, stockholders39。 equity). Stockholders39。 equity). Stockholders39。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