The $12,000 payment is for a one-year contract, however, we will only record revenue from October 1 up to December 31 which are the months that already lapsed. The remaining nine months are still considered unearned revenue. Thus, the remaining unearned revenue is $9,000.
Unearned revenue is the amount received from a client for a service that has yet to be rendered. Since the company has received the full balance over the services not yet provided. As of December 31, the unearned revenue will be $12,000.
Because the client paid the company for a year-long contract, the $12,000 represents a prepayment for the service the company has yet to render to their client. Using the accrual method, the revenue that is not earned as of December 31 is $9000.
john Hayes and Lynn Magosian, auditors for a public accounting firm, went to lunch at the Bay View Restaurant in San Francisco. John left his raincoat with a coatroom attendant, but Lynn took her new raincoat with her to the dining room, where she hung it on a coat hook near her booth. When leaving the restaurant, Lynn discovered that someone had taken her raincoat. When John sought to claim his raincoat at the coatroom, it could not be found. The attendant advised that it might have been taken while he was on his break. John and Lynn sued the restaurant, claiming that the restaurant was a bailee of the raincoats and had a duty to return them. Are both John and Lynn correct
John is correct but Lynn isn't
John is correct because he left his coat with the coatroom attendant under the premise that it would be properly looked after and returned to him when he was done having lunch at the restaurant. However, Lynn just left her coat lying around under no ones care or supervision, there wasn't a predetermined agreement that anyone would be responsible for watching it on her behalf, therefore I don't think she is has the right to sue.
Messing Company has an agreement with a third-party credit card company, which calls for cash to be received immediately upon deposit of customers' credit card sales receipts. The credit card company receives 3.5 percent of card sales as its fee. Messing has $4,000 in credit card sales on January 1.Prepare the January 1 journal entry for Messing Company
the Messing Company's January 1 notebook entry reads: Cash $3,860
Credit cost: 140
What is Sales?
A sale is an agreement between a buyer and a seller in which the seller exchanges money for the sale of tangible or intangible products, assets, or services. There are two or more parties involved in a sale. A sale, or a contract between two or more parties, such as the buyer and seller, can be thought of in larger terms.
Messing Company's January 1 notebook entry reads: Cash $3,860
oo, Inc., has arranged a line of credit that allows it to borrow up to $55 million at any time. The interest rate is .631 percent per month. Additionally, the company must deposit 5 percent of the amount borrowed in a non-interest bearing account. The bank uses compound interest on its line-of-credit loans. If the company needs $31 million for 8 months, how much will it pay in interest
If the company needs $31 million, and it must deposit 5% of what it borrows in a non-interest bearing account, then to have a net borrowing of $31 million, the amount it must borrow, B, is
B * (1 - 5%) = 31 million
= 0.95B = 31 million
and B = $32,631,578.95.
At 0.631% interest rate per month, for 8 months, the amount to be repaid after 8 months
Therefore, the amount paid in interest = 34,315,663.14 - 32,631,578.95
The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $350,000 Year 2 $475,000 Year 3 $400,000 Year 4 $475,000
Which of the following is the correct calculation of project Delta’s IRR?
A. 5.01% B. 5.51% C. 4.26% D. 6.01%
Correct option is A 5.01%
Let irr be x%
At irr,present value of inflows=present value of outflows.
Cyclical unemployment arises when:______. a. the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation's food supply. b. labor unions strike for higher wages. c. the business cycle enters an expansionary phase. d. business activity in the macroeconomy declines.
types of unemployment
structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition. Structural unemployment tends to be permanent.
The geologist lost his hob permanently due to increase in wages (polices)
Frictional unemployment: the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. when a real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.
Voluntary unemployment: e.g. worker at a fast-food restaurant who quits work and attends college.
Cyclical unemployment: it occurs as a result of fluctuations in the economy. Unemployment would be high in a downturn and low in a boom
Cyclical unemployment arises when business activity in the macroeconomy declines. It is directly linked to the ups and downs in the business cycle. When the economy moves into a recession, cyclical unemployment increases as businesses lay off workers.
Cyclical unemployment arises when: business activity in the macroeconomy declines. This is option D. It refers to the unemployment which is caused by the ups and downs in the overall economy, a phenomenon known as the business cycle. When the economy enters into a recession or contractionary phase, overall demand decreases, and businesses lay off workers as a result leading to an increase in unemployment. This is known as cyclical unemployment.
On the other hand, when the economy is in an expansionary phase, businesses are typically doing well and unemployment levels decrease as businesses hire more workers to meet the increased demand. Therefore, cyclical unemployment is directly related to the health of an economy.
In June 2007 General Motors (GM) posted a price-earnings ratio of 9.84. Ifthe price of the stock at that time was $36 per share, which of the following must have been true? a. GMâs earnings per share was 3.66. b. GMâs coupon payment was $35 per year. c. GMâs dividend yield for the year was 26%. d. GMâs revenues that month were $366 million.
General Motors (GM)
If the price of the stock at that time was $36 per share, the true statement is:
a. GM's earnings per share was 3.66.
a) Data and Calculations:
Price-earnings ratio = 9.84
Market price of stock at that time = $36 per share
Earnings per share = Market price per share/Price-earnings ratio
= $36/9.84 = 3.659
Price-earnings ratio = Market price per share/Earnings per share