Required E3-18 (Static) 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. Assets Cash Accounts Receivable 3,200 8,000 Long-Term Investments 6,400 Liabilities Accounts Payable Unearned Revenue Long-Term Notes Payable Stockholders' Equity Common Stock ($0.10 par value) Additional Paid-in Capital Retained Earnings Revenues Consulting Fee Revenue Interest Revenue Expenses Wages Expense Travel Expense Utilities Expense Rent Expense Transactions for 2019: a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account. b. Received $5,600 cash from clients on account. c. Received $400 in cash as interest revenue on investments. d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable. e. Received $1,600 in cash from clients in advance of services Massa will provide next year. f. Received a utility bill for $800 for 2019 services. g. Declared and immediately paid $480 in dividends to stockholders. -18 Part 4 Calculate the net profit margin ratio for 2019. (Round your answer to 2 decimal places.) 2,400 1,600 800 3,200 5,600 4,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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### Required Information

**E3-18 (Static) 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.

#### Assets

| Cash    | Accounts Receivable |
|----------|------------------------|
| 3,200    | 8,000                    |
| **Long-Term Investments**          |
| | 6,400 |

#### Liabilities

| Accounts Payable | Unearned Revenue |
|--------------------------|------------------------|
| 2,400                        | 5,600                    |
| **Long-Term Notes Payable**    |
| | 1,600 |

#### Stockholders' Equity

| Common Stock ($0.10 par value) | Additional Paid-in Capital |
|---------------------------------|-------------------------------|
| 800                                        | 4,000                              |
| **Retained Earnings** |
| | 3,200 |

#### Revenues

| Consulting Fee Revenue | Interest Revenue |
|--------------------------------|---------------|

#### Expenses

| Wages Expense | Travel Expense |
|---------------------|--------------------|
| Utilities Expense | Rent Expense |
|---------------------|--------------------|

#### Transactions for 2019:

a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account.
b. Received $5,600 cash from clients on account.
c. Received $400 in cash as interest revenue on investments.
d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable.
e. Received $1,600 in cash from clients in advance of services Massa will provide next year.
f. Received a utility bill for $800 for 2019 services.
g. Declared and immediately paid $480 in dividends to stockholders.

### E3-18 Part 4

4. Calculate the net profit margin ratio for 2019. **(Round your answer to 2 decimal places
Transcribed Image Text:--- ### Required Information **E3-18 (Static) 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. #### Assets | Cash | Accounts Receivable | |----------|------------------------| | 3,200 | 8,000 | | **Long-Term Investments** | | | 6,400 | #### Liabilities | Accounts Payable | Unearned Revenue | |--------------------------|------------------------| | 2,400 | 5,600 | | **Long-Term Notes Payable** | | | 1,600 | #### Stockholders' Equity | Common Stock ($0.10 par value) | Additional Paid-in Capital | |---------------------------------|-------------------------------| | 800 | 4,000 | | **Retained Earnings** | | | 3,200 | #### Revenues | Consulting Fee Revenue | Interest Revenue | |--------------------------------|---------------| #### Expenses | Wages Expense | Travel Expense | |---------------------|--------------------| | Utilities Expense | Rent Expense | |---------------------|--------------------| #### Transactions for 2019: a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account. b. Received $5,600 cash from clients on account. c. Received $400 in cash as interest revenue on investments. d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable. e. Received $1,600 in cash from clients in advance of services Massa will provide next year. f. Received a utility bill for $800 for 2019 services. g. Declared and immediately paid $480 in dividends to stockholders. ### E3-18 Part 4 4. Calculate the net profit margin ratio for 2019. **(Round your answer to 2 decimal places
### Required Information

**E3-18 (Static) 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.]

---

### Overview

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.

---

#### Assets

| **Assets**             | **Amount (in thousands)** |
|------------------------|---------------------------|
| **Cash**               | 3,200                     |
| **Accounts Receivable**| 8,000                     |
| **Long-Term Investments** | 6,400                 |

#### Liabilities

| **Liabilities**            | **Amount (in thousands)** |
|----------------------------|---------------------------|
| **Accounts Payable**       | 2,400                     |
| **Unearned Revenue**       | 5,600                     |
| **Long-Term Notes Payable**| 1,600                     |

#### Stockholders' Equity

| **Stockholders' Equity**      | **Amount (in thousands)** |
|-------------------------------|---------------------------|
| **Common Stock ($0.10 par value)** | 800                 |
| **Additional Paid-in Capital**| 4,000                     |
| **Retained Earnings**         | 3,200                     |

#### Revenues

| **Revenues**                  | **Amount (in thousands)** |
|-------------------------------|---------------------------|
| **Consulting Fee Revenue**    |                           |
| **Interest Revenue**          |                           |

#### Expenses

| **Expenses**                  | **Amount (in thousands)** |
|-------------------------------|---------------------------|
| **Wages Expense**             |                           |
| **Travel Expense**            |                           |
| **Utilities Expense**         |                           |
| **Rent Expense**              |                           |

### Transactions for 2019

a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account.  
b. Received $5,600 cash from clients on account.  
c. Received $400 in cash as interest revenue on investments.
Transcribed Image Text:### Required Information **E3-18 (Static) 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.] --- ### Overview 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. --- #### Assets | **Assets** | **Amount (in thousands)** | |------------------------|---------------------------| | **Cash** | 3,200 | | **Accounts Receivable**| 8,000 | | **Long-Term Investments** | 6,400 | #### Liabilities | **Liabilities** | **Amount (in thousands)** | |----------------------------|---------------------------| | **Accounts Payable** | 2,400 | | **Unearned Revenue** | 5,600 | | **Long-Term Notes Payable**| 1,600 | #### Stockholders' Equity | **Stockholders' Equity** | **Amount (in thousands)** | |-------------------------------|---------------------------| | **Common Stock ($0.10 par value)** | 800 | | **Additional Paid-in Capital**| 4,000 | | **Retained Earnings** | 3,200 | #### Revenues | **Revenues** | **Amount (in thousands)** | |-------------------------------|---------------------------| | **Consulting Fee Revenue** | | | **Interest Revenue** | | #### Expenses | **Expenses** | **Amount (in thousands)** | |-------------------------------|---------------------------| | **Wages Expense** | | | **Travel Expense** | | | **Utilities Expense** | | | **Rent Expense** | | ### Transactions for 2019 a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account. b. Received $5,600 cash from clients on account. c. Received $400 in cash as interest revenue on investments.
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