【正文】 rrent 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。 equity). Together, stockholders39。 equity). Stockholders39。 equity). Stockholders39。 equity). Stockholders39。 earnings process is not yet plete.l.Sales revenue$9,600m.Sales revenue$300E3–4. ActivityExpense Account Affected Amount of Expense Incurred in Januarya.Utilities expense $3,800b.Advertising expense$321(= $963 x 1 month/3 months) incurred in January.The remainder is a prepaid expense (A) that is not incurred until February and March.c.Salaries expense $201,500 incurred in January.The remaining half was incurred in December.d.None Expense will be recorded when the related revenue has been earned.e.NoneExpense will be recorded in the future when the related revenue has been earned.f.Cost of goods sold $47,500(= 500 books x $95 per book cost)g.NoneDecember expense paid in January.h.Commission expense$15,560i.NoneExpense will be recorded as depreciation (used portion of asset’s cost) over the equipment’s useful life.j.Supplies expense $4,700 (= $3,500 + $2,600 $1,400)k.Wages expense $120 (= 8 hours x $15 per hour)l.Insurance expense $400(= $4,800 247。 earnings process is not yet plete.j.Ticket sales revenue $3,900,000 (= $19,500,000 247。 earnings process is not yet plete.h.NoneNo revenue is earned。 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。 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。 cash collections in July related to earnings in June.d.NoneNo revenue earned in July。 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。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