Question

Required information [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 $59,300 in services to clients who paid $48,900 in cash and owed the rest on account. b. Received $6,100 cash from clients on account. c. Received $450 in cash as interest revenue on investments. d. Paid $34,700 in wages, $12,900 in travel, $6,700 in rent, and $700 on accounts payable. e. Received $1,200 in cash from clients in advance of services Massa will provide next year. f. Received a utility bill for $660 for 2019 services. g. Declared and immediately paid $360 in dividends to stockholders. Assets Cash Accounts Receivable 8,200 4,100 Long-Term Investments 6,400 Liabilities Accounts Payable Unearned Revenue 1,500 5,400 Long-Term Notes Payable 1,500 Stockholders' Equity Common Stock ($0.10 par value) Additional Paid-in Capital 3,485 615 Retained Earnings 6,200 Revenues Consulting Fee Revenue Interest Revenue Expenses Wages Expense Travel Expense Utilities Expense Rent Expense

Answer 1

Assets Cash Account Receivable Beg Bal. 8200 Cash 6100 10400 oo Wages 34700 48900 Travel landbol. 12500 12goo 6100 Rent 6700 450 Arcount Posable th 1200 Dividend 360 End Bal. 5390 long Term Investment Beg Bal. 6400 Account Payable Beg Bal. Soo 660 Too End bal. 1460 End bal. 6400 Unearned Revenue sal. 5400 1200 long Term Notes Payables / Beg Bal. 1500 End bal. 15ool End bal. 6600 lommon Stock Beg Bal. 615 6151 Additional Paid in Capital Beg Bal. 3485 End 3485 - End tal

Docen: Retained Earnings 360 Beg bal. 6200 ile 4790 Endbal. 10630 Consulting fees Revenue ocht Bogbal toor To $9300 Endball o n 59300 I (Interest) Iustment Income Beybal. 450 Wage expenses. Bog bal. 34700 ano 0 Endbal 34700 Droge with End bal. 450 expenses Travel Beg tal. 12900 error Utility expenses Bes belo66 Endbal 660 Endbal 12800 Rent expenses Beg tal 6700 Tend bal. 6700

5. Revenue $59750 Exproses $54960 = Net Income $4790! Assets $24290 = liabilities $9560 - stockholder's Equity $144730 Revenue = consulting fees Revenue $ 59200 + Investment inome $450 &59750 HA HA Expenses Wages expenses = $34700 Travel expenses = $ 12900 UHLhe espome = LED Rent expenses - $ 6700 $54960 Assets Cash = $5390 Account Receivable $ 12500 long Term investments & 6400 $242go liabilities Account Payable = $1460 Unearned Revenue = $6600 long Term notes Payable = $ 1500 $9560 Stockholder Common stock $615 Additional Paid in Capital & 3485 Retained Earnie § 10630 $14730