Question

Required information E3-18 (Algo) Analyzing the Effects of Transactions Using T-Accounts and Interpreting the Net Profit Margin Ratio as a Financial Analyst LO3-4, 3-6 The following information applies to the questions displayed below. Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com companies. You are a financial analyst assigned to report on the Massa management team's effectiveness at managing its assets efficiently. At the start of 2019 (its fourth year), Massa's T-account balances were as follows. Dollars are in thousands Transactions for 2019: a. Provided $58,400 in services to clients who paid $48,800 in cash and owed the rest on account. b. Received $5.900 cash from clients on account. c. Received $430 in cash as interest revenue on investments d. Paid $35.200 in wages. $12.800 in travel. $7100 in rent, and $800 on accounts payable. e. Received $1.900 in cash from clients in advance of services Massa will provide next year. f. Received a utility bill for $730 for 2019 services. g. Declared and immediately paid $300 in dividends to stockholders. < Prev 23 of 3

a) Enter the 2019 transactions in T-accounts

Answer 1

T-Accounts:

Assets Beg. Bal. a) $5,900 $55,900 $300 Accounts Receivable Beg. Bal. $8,600 b) a) ($58,400 - $48,800) $9,600 Cash $3,300 d) $48,800 g) $5,900 $430 $1,900 Long-term Investments $7,400 Beg. Bal. Liabilities Accounts Payable $800 Beg. Bal. Unearned Revenue Beg. Bal. d) $1,600 $4,900 $1,900 $730 Long-term Notes Payable Beg. Bal. $1,700

Stockholders' Equity Common Stock ($0.10 par value) Beg. Bal. $645 Additional Paid-in Capital Beg. Bal. $3,655 Retained Earnings $300 Beg. Bal. $6,800 Revenues Consulting Fee Revenue Interest Revenue $58,400 $430 Expenses d) Wages Expense $35,200 Travel Expense $12,800 Utilities Expense $730 Rent Expense $7,100