BARB\'S BOOK BUSINESS Unadiusted Trial Balance Credit Account Name Cash Accounts
ID: 2333880 • Letter: B
Question
BARB'S BOOK BUSINESS Unadiusted Trial Balance Credit Account Name Cash Accounts Receivable Supplies Prepaid Rent Land Equipment Notes Payable (long-term) Common Stock Sales Revenue Advertising Expense Salaries and wages Expense Repairs and Maintenance Expense Total Debit $ 20,269 2,136 330 2,625 10,200 5,400 15,600 23,000 3,950 740 850 $ 42,550$42,550 Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information, calculate preliminary net income and net profit margin? (Round your Net Profit Margin answer to 1 decimal place.) Preliminary Net Income Net Profit MarginExplanation / Answer
Working notes
Calculation of Preliminary Net income
Sales Revenue
$ 3,950.00
Less: Expenses
Advertising Expense
$ 740.00
Repairs and maintenance Expense
$ 850.00
Total Expenses
$ 1,590.00
Net Preliminary Income
$ 2,360.00
Preliminary net income is income before making any adjustments such as recoding of accrues expenses and accrued income.
Calculation of net Profit margin
Net profit Margin = Net income/ Sales
Net profit Margin = $ 2360/ $ 3950
Net profit Margin = 59.75%
Answers
Preliminary net income
$ 2,360.00
Net profit margin
59.75%
Note. Net profit margin is calculated taking net preliminary income into consideration
Calculation of Preliminary Net income
Sales Revenue
$ 3,950.00
Less: Expenses
Advertising Expense
$ 740.00
Repairs and maintenance Expense
$ 850.00
Total Expenses
$ 1,590.00
Net Preliminary Income
$ 2,360.00
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