Question

Homework 3 Saved Help Save & Exit Submit Check my work Rowland & Sons Air Transport Service, Inc., has been in operation for three years. The following transactions occurred in February points Feb. 1 Paid $265 for rent of hangar space in February. Received customer payment of $930 to ship several items to Philadelphia next Feb. 9 month. eBook Feb. 7 Flew cargo from Denver to Dallas; the customer paid in full ($1,050 cash). Feb.10 Incurred and paid $1,750 in pilot wages for flying in February. Feb. 14 Paid $130 for an advertisement run in the local paper on February 14. Feb.18 10 Plew cargo for two customers from Dallas to Albuquerque for $2,740; one customer paid $840 cash and the other asked to be billed $1,900. Feb. 25 Purchased on account $1,580 in supplies for future use on the planes. 05 Hint Required: Print 1. Prepare accrual basis journal entries for each transaction. Reference 2. Calculate the company's preliminary net income. 3. Calculate the company's net profit margin expressed as a percent. Complete this question by entering your answers in the tabs below. Required Required Required 2 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.) x View transaction list View journal entry worksheet No Date General Journal 1 Feb 01 Rent Expense Cash Credit Debit 265 | 265 2 Feb 04 Cash 930 930 3 Feb 07 Cash 1,050 1,050 Feb 10 Salaries and Wages Expense Cash 1,750 1,750 5 Feb 14 Advertising Expense Cash 130 130 6 Feb 18 Cash Accounts Receivable Service Revenue 8401 1.900 2,740 Required 1 Required 2 >

Answer 1

Requirement 1:

Date	Account title and Explanation	Debit	Credit
Feb 1	Rent expense	$265
	Cash		$265
	[To record payment of rent]
Feb 4	Cash	$910
	Unearned revenue		$910
	[To record cash received from customers in advance]
Feb 7	Cash	$1,050
	Service revenue		$1,050
	[To record service revenue]
Feb 10	Wages expense	$1,750
	Cash		$1,750
	[To record payment of wages]
Feb 14	Advertisement expense	$130
	Cash		$130
	[To record payment of advertisements]
Feb 18	Cash	$840
	Accounts receivable	$1,900
	Service revenue		$2,740
	[To record service revenue]
Feb 25	Supplies	$1,580
	Accounts payable		$1,580
	[To record purchase of supplies on account]

Requirement 2:

Service revenue [1,050+2,740]		$3,790
Expenses:
Rent expense	$265
Wages expense	$1,750
Advertisement expense	$130
Total expenses		$2,145
Preliminary net income		$1,645

Requirement 3:

Net profit margin = Net income ÷ Service revenue

= ($1,645/$3,790) x 100

= 43.4%