Question

An analysis of transactions made during July by NepCo, an Internet service provider, during its first month of operations is shown below. Increases and decreases affecting revenues and expenses are explained. Stockholders' E ssets Accounts Commorn Accounts Receivable Supplies Equipment Stock Retained Earnings +18,500 Payable -770 5.400 875 Cosh (0) -18,500 -770 Utilities expense +4,800 Service revenue 4,800 11,700 (d) -6.300 (e) +1.900 1,900 Service revenue 875 -4050 (9) -4,050 (h) -2.940 0 -970 01440 1,440 -2,940 Wage expense -970 Rent expense 7580 3,360 87511700 2,995 18,500 2,020 4. value: 1.00 points Required: 1. Describe the business activites that led to the accounting equation effects for each transaction shown above tatements Activities c. Collected cash from customers on account. Incurrad of utilities expense in July, not yet paid. tssued common stock for cash Paid cash for wage expense. Type here tan

Answer 1

Answer to Requirement 1. Financial Statements Activitie Issued Common Stock for Cash Incurred of Utilities expense in July, not vet paid Rendered Service on account Purchased Equipment by paying $6,300 in cash and balance on account Rendered Service for Cash Purchased Supplies on account Paid Cash on accounts Paid Cash for Wage Expense Paid Cash for Rent Expense Collected Cash from customers on account f. h.

Answer to Requirement 3-a.

Net Profit Margin = Net Income / Sales * 100
Net Profit Margin = 2,020/ 6,700 * 100
Net Profit Margin = 30.1%

Answer to Requirement 3-b.

More, NepCo is more profitable as it has higher Net Profit Margin.