Question

my answers may be incorrect. thanks.

Saved Help Save& Exit Subm Chapter 3 Homework 6 Jessica Pothier opened FunFlatables on June 1. The company rents out moon walks and inflatable slides for parties and corporate events. The company also has obtained the use of an abandoned ice rink located in a local shopping mall, where its rental products are displayed and available for casual hourly rental by mall patrons. The following transactions occurred during the first month of operations a Jessica contributed $48,000 cash to the company on June 1 in exchange for its common stock. b Purchased inflatable rides and inflation equipment on June 2, paying $28,950 cash. c Received $7.800 cash from casual hourly rentals at the mall on June 3 d Rented rides and equipment to customers for $11,000. Received cash of $2,100 on June 4 and the rest is due from customers. e. Received $3,600 from a large corporate customer on June 5 as a deposit on a party booking for July 4 f Began to prepare for the July 4 party by purchasing and receiving various party supplies on June 6 on account for $630. g. On June 7, paid $8,700 in cash for renting the mall space this month. points eBook Print References h. On June 8. prepaid next month's mall space rental charge of $8,700. i Received $2,000 on June 9 from customers on accounts receivable. Paid $1,850 for running a television ad on June 10 k. Paid $4,450 in wages to employees on June 30 for work done during the month. Required: 1. Prepare the journal entry for each of the above transactions. 2. Post the transaction activity from requirement 1 to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations. 3. Prepare an unadjusted trial balance for the end of June. 4-a. Refer to the revenues and expenses shown on the unadjusted trial balance to calculate preliminary net income and net proft 4-b. Determine whether the net profit margin is better or worse than the 300 percent earned by a close competitor margin. Prex6 of 8 Next

Answer 1

6)
1. Journal Entries:
	Date	Accounts Title	Debit $	Credit $
a	1-Jun	Cash	48000
		Cstock		48000
		(being CS issued of cash)
b	2-Jun	Equipmnet	28950
		Cash		28950
		(being equipment purchased)
c	3-Jun	Cash	7800
		Rental revenue		7800
		(being rental services made for cash)
d	4-Jun	Cash	2100
		AR	8900
		Rental revenue		11000
		(being rental services provided)
e	5-Jun	Cash	3600
		Unearned rental revenue		3600
		(being rental reve. Recd. In advance for July 4)
f	6-Jun	Supplies	630
		Accounts Payable		630
		(being supplies reced. On credit)
g	7-Jun	Rent expense	8700
		Cash		8700
		(being rent exp paid in cash)
h	8-Jun	Prepaid rent	8700
		Cash		8700
		(being prepaid rent made)
i	9-Jun	Cash	2000
		AR		2000
		(being cash recd fro AR)
j	10-Jun	Advertising exp	1850
		cash		1850
		(being advert exp made)
k	30-Jun	Wages exp	4450
		Cash		4450
		(being wages paid)

2/ T-Account:
DEBIT	AMOUNT$	CREDIT	AMOUNT$
Cash A/c
a	48000	b	28950
c	7800	g	8700
d	2100	h	8700
e	3600	j	1850
i	2000	k	4450
		CB	10850
Common Stock a/c
		a	48000
Equipment A/c
b	28950
Rental revenue a/c
CB	18800	c	7800
		d	11000
AR a/c
d	8900	i	2000
		CB	6900
Unearned rental revenue a/c
		e	3600
Supplies a/c
f	630
AP a/c
		f	630
Rent exp a/c
g	8700
Prepaid rent a/c
h	8700
Advertising exp a/c
j	1850
Wages exp a/c
k	4450

3) Unadjusted Trial Balance:
Accounts Title	Debit $	Credit $
Cash	10850
CS		48000
Equipment	28950
Rental rev		18800
AR	6900
Unearned rental rev		3600
supplies	630
AP		630
rent exp	8700
Prepaid rent	8700
Advertising	1850
Wages	4450
Total	71030	71030
4a) Income Statement:
Rental rev.	18800
Less: expenses:
rent	8700
advert.	1850
wages	4450
Total expenses	15000
Net Income	3800
4b) Net profit margin = 3800 / 18800 = 20.21%
Jessica is performing worse to competitor with NP margin 30%.