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Tutorial 2

Tutorial 2. Question P3-6. T-accounts for May 31, 2011. Temporary T-accounts. Transactions. A) Provided delivery service to customers, receiving $4,567 in accounts receivable and $17,600 in cash. Transactions. B) Purchased new equipment costing $1,345; signed a long-term note. Transactions.

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Tutorial 2

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  1. Tutorial 2 Question P3-6

  2. T-accounts for May 31, 2011

  3. Temporary T-accounts

  4. Transactions • A) Provided delivery service to customers, receiving $4,567 in accounts receivable and $17,600 in cash

  5. Transactions • B) Purchased new equipment costing $1,345; signed a long-term note

  6. Transactions • C) Paid $4,598 cash to rent equipment and aircraft, with $3,067 for rental this year and the rest for rent next year. ?

  7. Transactions • D) Spent $1,348 in cash to maintain and repair facilities and equipment during the year.

  8. Transactions • E) Collected $4,824 from customers on account

  9. Transactions • F) Repaid $18 on a long term note

  10. Transactions • G) Issued additional stock for $16

  11. Transactions • H) Paid employees $10,031 during the year

  12. Transactions • I) Purchased in cash and used $5,348 in fuel for the aircraft and equipment during the year.

  13. Transactions • J) Paid $784 on accounts payable

  14. Transactions • K) Ordered $72 in spare parts and supplies • Only ordered, no goods received yet • Not a transaction

  15. 2012 Effects

  16. Current Assets Noncurrent Assets

  17. Noncurrent Liabilities Stockholder’s Equity Current Liabilities

  18. Temporary T-accounts

  19. Income Statement

  20. Statement of SE

  21. Balance Sheet

  22. Statement of Cash Flows

  23. Total Asset Turnover Ratio • Measures sales generated per dollar of assets. Higher = more efficient at managing assets. Total Asset Turnover Ratio Sales (or Operating) Revenues Average Total Assets = (Beginning total assets + ending total assets) / 2

  24. Total Asset Turnover Ratio 1.44 22,167 15,446 = (13,306 + 17,586) / 2

  25. Total Asset Turnover Ratio • 1.44 • Very hard to tell anything without comparing to close competitors

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