Question

Rowland & Sons Air Transport Service, Inc. has been in operation for three years. The following transactions occurred in February Feb. 1 Paid $555 for rent of hangar space in February Feb. 4 Received customer payment of $1,100 to ship several items to Philadelphia next month. Feb. 7 Flew cargo from Denver to Dallas; the customer paid in full ($1,100 cash). Feb. 10 Paid pilots $1,850 in wages for fying in February Feb. 14 Paid $164 for an advertisement run in the local paper on February 14 Feb. 18 Flew cargo for two customers from Dallas to Albuquerque for $2.365; one customer paid $825 cash and the other asked to be billed $1,540 Feb. 25 Purchased on account $1,570 in supplies for future use on the planes. Required: 1. Prepare accrual basis journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 6 Paid $553 for rent of hangar space in February. Record the transaction. Note: Enter debits before credits. Date General Journal Debit Credit Feb 01 Record entry Clear entry View general journal

Answer 1

1)
Feb-01	Rent expense	555
	Cash		555
Feb-04	Cash	1000
	Unearned freight revenue		1000
Feb-07	Cash	1100
	Freight revenue		1100
Feb-10	Wages and salaries expense	1850
	Cash		1850
Feb-14	Advertisement expenses	164
	Cash		164
Feb-18	Cash	825
	Freight revenue		825
	Accounts receivable	2365
	Freight revenue		2365
Feb-25	Supplies	1570
	Accounts payable		1570
2)	Net Income:
	Freight revenue = 1100+825+2365 =	4290
	Expenses = 555+1850+164 =	2569
	Net income	1721
3)	Net profit margin = 1721/4290 =	40.1%