P3-4 Analyzing the Effects of Transactions Using T-Accounts, Preparing an Income Stateme

Kaylee James, a connoisseur of fine chocolate, opened Kaylees Sweets in Collegetown on February 1,
candies and a line of gourmet ice cream. You have been hired as manager. Your duties include mainta
transactions occurred in February 2014, the first month of operations.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.

Received four shareholders contributions totaling $30,200 cash to form the corporation; is
Paid three months' rent for the store at $1,750 per month (recorded as prepaid expenses).
Purchased and received candy for $6,000 on account, due in 60 days.
Purchased supplies for $1,560 cash.
Negotiated and signed a two-year $11,000 loan at the bank.
Used the money from (e) to purchase a computer for $2,750 (for recordkeeping and invent
Placed a grand opening advertisement in the local paper for $400 cash; the ad ran in the c
Made sales on Valentine's Day totaling $3,500; $2,675 was in cash and the rest on account
Made a $550 payment on accounts payable.
Incurred and paid employee wages of $1,300.
Collected accounts receivable of $600 from customers.
Made a repair to one of the display cases for $400 cash.
Made cash sales of $1,200 during the rest of the month. The cost of the candy sold was $6

Required:
1 & 2.
Record in the T-accounts the effects of each transaction for Kaylees Sweets in Fe
letter. Show the ending balances in the T-accounts. An example amount has been
Cash
Beg. bal.
400 (l)

End. bal.

400
Supplies

Beg. bal.

End. bal.
Prepaid Expenses
Beg. bal.

End. bal.
Furniture and Fixtures
Beg. bal.

End. bal.
Notes Payable
Beg. bal.

End. bal.
Additional Paid-in Capital
Beg. bal.

End. bal.
Cost of Goods Sold
Beg. bal.

End. bal.

Advertising Expense
Beg. bal.

End. bal.

Required:
3 Prepare an income statement at the end of the month ended February 28, 2014.

Required:
5 After three years in business, you are being evaluated for a promotion. One mea

The following data are available:

5-a.

Calculate the net profit margin ratio for each year. (Round your answers to 1 dec
Net Profit Margin Ratio
2016
2015
2014

5-b.

%
%
%

Do you think you should be promoted?

Y
E
S
N
O

sing T-Accounts, Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio as a M

ened Kaylees Sweets in Collegetown on February 1, 2014. The shop specializes in a selection of gourmet choco
e been hired as manager. Your duties include maintaining the stores financial records. The following
month of operations.

ons totaling $30,200 cash to form the corporation; issued 400 shares of $.10 par value common stock.
$1,750 per month (recorded as prepaid expenses).
00 on account, due in 60 days.

000 loan at the bank.

a computer for $2,750 (for recordkeeping and inventory tracking); used the balance for furniture and fixtures for
in the local paper for $400 cash; the ad ran in the current month.
$3,500; $2,675 was in cash and the rest on accounts receivable. The cost of the candy sold was $1,600.

from customers.
es for $400 cash.
est of the month. The cost of the candy sold was $600.

ts of each transaction for Kaylees Sweets in February, referencing each transaction in the accounts
n the T-accounts. An example amount has been posted to the Cash T-Account from transaction (l).
Accounts Receivable
Beg. bal.

End. bal.

Inventory
Beg. bal.

End. bal.
Equipment
Beg. bal.

End. bal.
Accounts Payable
Beg. bal.

End. bal.
Common Stock
Beg. bal.

End. bal.
Sales Revenue
Beg. bal.

End. bal.
Repair Expense
Beg. bal.

End. bal.

Wage Expense
Beg. bal.

End. bal.

he end of the month ended February 28, 2014.

KAYLEES SWEETS
Income Statement (unadjusted)
For the Month Ended February 28, 2014
Revenues:

Expenses:

Total cost and expenses

are being evaluated for a promotion. One measure is how effectively you managed the sales and e

Total assets
Total liabilities
Total stockholders equity
Net sale revenue
Net income

2016*

$
88,000 $
49,500
38,500
93,500
22,000

2015
58,500
22,000
36,500
82,500
11,000

2014
52,500
18,500
34,000
55,000
4,400

* At the end of 2016, Kaylee decided to open a second store, requiring loans and inventory
purchases prior to the stores opening in early 2017.

io for each year. (Round your answers to 1 decimal place.)

Margin Ratio as a Manager LO3-4, 3-5, 3-6

ction of gourmet chocolate

e following

ommon stock.

urniture and fixtures for the store.

old was $1,600.

ction in the accounts with the transaction

om transaction (l).

le

aged the sales and expenses of the business.

nd inventory

P3-4 Analyzing the Effects of Transactions Using T-Accounts, Preparing an Income Stateme

Kaylee James, a connoisseur of fine chocolate, opened Kaylees Sweets in Collegetown on February 1,
candies and a line of gourmet ice cream. You have been hired as manager. Your duties include mainta
transactions occurred in February 2014, the first month of operations.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.

Received four shareholders contributions totaling $30,200 cash to form the corporation; is
Paid three months' rent for the store at $1,750 per month (recorded as prepaid expenses).
Purchased and received candy for $6,000 on account, due in 60 days.
Purchased supplies for $1,560 cash.
Negotiated and signed a two-year $11,000 loan at the bank.
Used the money from (e) to purchase a computer for $2,750 (for recordkeeping and invent
Placed a grand opening advertisement in the local paper for $400 cash; the ad ran in the c
Made sales on Valentine's Day totaling $3,500; $2,675 was in cash and the rest on account
Made a $550 payment on accounts payable.
Incurred and paid employee wages of $1,300.
Collected accounts receivable of $600 from customers.
Made a repair to one of the display cases for $400 cash.
Made cash sales of $1,200 during the rest of the month. The cost of the candy sold was $6

Required:
1 & 2.
Record in the T-accounts the effects of each transaction for Kaylees Sweets in Fe
letter. Show the ending balances in the T-accounts. An example amount has been
Cash
Beg. bal.
400 (l)

End. bal.
Supplies
Beg. bal.

End. bal.
Prepaid Expenses
Beg. bal.

End. bal.
Furniture and Fixtures
Beg. bal.

End. bal.
Notes Payable
Beg. bal.

End. bal.
Additional Paid-in Capital
Beg. bal.

End. bal.
Cost of Goods Sold
Beg. bal.

End. bal.

Advertising Expense
Beg. bal.

End. bal.

Required:
3 Prepare an income statement at the end of the month ended February 28, 2014.

Required:
5 After three years in business, you are being evaluated for a promotion. One mea

The following data are available:

5-a.

Calculate the net profit margin ratio for each year. (Round your answers to 1 dec
Net Profit Margin Ratio
2016
2015
2014

5-b.

%
%
%

Do you think you should be promoted?

Y
E
S
N
O

sing T-Accounts, Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio as a M

ened Kaylees Sweets in Collegetown on February 1, 2014. The shop specializes in a selection of gourmet choco
e been hired as manager. Your duties include maintaining the stores financial records. The following
month of operations.

ons totaling $30,200 cash to form the corporation; issued 400 shares of $.10 par value common stock.
$1,750 per month (recorded as prepaid expenses).
00 on account, due in 60 days.

000 loan at the bank.

a computer for $2,750 (for recordkeeping and inventory tracking); used the balance for furniture and fixtures for
in the local paper for $400 cash; the ad ran in the current month.
$3,500; $2,675 was in cash and the rest on accounts receivable. The cost of the candy sold was $1,600.

from customers.
es for $400 cash.
est of the month. The cost of the candy sold was $600.

ts of each transaction for Kaylees Sweets in February, referencing each transaction in the accounts
n the T-accounts. An example amount has been posted to the Cash T-Account from transaction (l).
Accounts Receivable
Beg. bal.

End. bal.

Inventory
Beg. bal.

End. bal.
Equipment
Beg. bal.

End. bal.
Accounts Payable
Beg. bal.

End. bal.
Common Stock
Beg. bal.

End. bal.
Sales Revenue
Beg. bal.

End. bal.
Repair Expense
Beg. bal.

End. bal.

Wage Expense
Beg. bal.

End. bal.

he end of the month ended February 28, 2014.

KAYLEES SWEETS
Income Statement (unadjusted)
For the Month Ended February 28, 2014
Revenues:

Expenses:

Total cost and expenses

Net income

0
$400

are being evaluated for a promotion. One measure is how effectively you managed the sales and e

Total assets
Total liabilities
Total stockholders equity
Net sale revenue
Net income

2016*
$ 88,000
49,500
38,500
93,500
22,000

2015
$ 58,500
22,000
36,500
82,500
11,000

2014
$ 52,500
18,500
34,000
55,000
4,400

* At the end of 2016, Kaylee decided to open a second store, requiring loans and inventory
purchases prior to the stores opening in early 2017.

io for each year. (Round your answers to 1 decimal place.)

fit Margin Ratio as a Manager LO3-4, 3-5, 3-6

ection of gourmet chocolate

he following

common stock.

furniture and fixtures for the store.

sold was $1,600.

action in the accounts with the transaction

from transaction (l).

naged the sales and expenses of the business.

and inventory