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Aleonysh [2.5K]
3 years ago
5

Aurora Corporation operated without insurance coverage for the first month of 2019. Then, on February 1, 2019, the company paid

the $4,800 premium on a two-year insurance policy with benefits beginning on that date. The company uses the accrual basis. How much insurance expense will be reported on the company's income statement for the year ended December 31, 2019? a) $200 b) $2,200 c) $4.600 d) $4,800
Business
1 answer:
Genrish500 [490]3 years ago
3 0

Answer:

Correct answer is letter B, $2,200

Explanation:

Using accrual basis method, revenue and expenses will be recognized when incurred.

The $4,800 is a 24 months policy, therefore we must compute the insurance expense applicable for the year covering from February 1 to December 31 (11 months)

An adjusting entry to recognize the expire portion of the insurance must be done at the year end in the amount of $2,200.

($4,800 / 24 months = $200 x 11 months = $2,200)

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Blue Spruce, Inc. is considering purchasing equipment costing $72000 with a 6-year useful life. The equipment will provide annua
Stella [2.4K]

The approximate internal rate of return for this investment is $0.054.

<h3><u>What is rate of return?</u></h3>
  • The net gain or loss of an investment over a given time period, stated as a percentage of the investment's starting cost, is known as a rate of return (RoR).
  • You determine the percentage change from the start of the period to the end when computing the rate of return.
  • Any type of investment instrument, including real estate, bonds, equities, and fine art, can be subject to a rate of return (RoR).

Any asset can be used with the RoR as long as it is purchased once and generates cash flow at some point in the future. The attractiveness of various investments can be determined, in part, by comparing their historical rates of return to those of comparable assets.

We have, (Net Annual cash inflow x PV of an Annuity of 1 at 10%) - Initial Investment = Net present value (find closest to zero))

($17,514 x 4.111) = $72000.054 - $72,000 = $0.054 (closest to zero).

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6 0
1 year ago
______ factors are things in the global environment that may impact a firm’s operations or success, examples are a rise in inter
castortr0y [4]

Answer:

External.

Explanation:

The external factors in an organization, are all factors of its macroeconomic environment, and which directly or indirectly influence the results of its business, some of these factors can be: capital, inflation, technological changes, political changes, social changes, etc.

It is essential that managers establish in their strategic plans the external environment, so that there is security and control to deal with unexpected changes that can affect the profitability of a company, it is necessary to have control of capital, assets and liabilities, in addition to consider the changes that may occur and are not controllable.

5 0
3 years ago
Which of the following is included in the normal journal entry to record the collection of accounts receivable previously writte
dlinn [17]

Answer:

Debit Accounts Receivable, credit Allowance for Doubtful Accounts.

Explanation:

To record the collection of accounts receivable previously written off when using the allowance method, the first step is  to debit Accounts Receivable, and then credit Allowance for Doubtful Accounts. This purpose of this to reverse the already written off amount.

The next step after that is to complete the entries by debiting Cash, and crediting the Accounts Receivable to record the cash collection in respect of previously written off accounts receivable.

8 0
3 years ago
The graph below represents the low-wage labor market demand curve for a U.S. city; there is also a line (MinWg) showing a $12 ho
alexandr402 [8]

The new ordinance will make a difference when the new wages will be binding.

<h3>How to depict the information?</h3>

It should be noted that the supply curve shows the relationship between the price and the quantity supplied.

Based on the information given, when the equilibrium wage is above the minimum wage, the ordinance won't make a difference.

On the other hand, when the equilibrium wage is below the minimum wage, it'll make a difference for the worker.

Therefore, joining the lowest of the two points will give the equilibrium.

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7 0
1 year ago
Refer to the financial statements of Flathead Lake Manufacturing Company. The firm's cash flow from operating activities for 201
Helen [10]

The firm's cash flow from operating activities for 2012 was D. $618000.

<h3>What Is the Definition of Cash Flow From Operating Activities (CFO)?</h3>

The cash flow from operating activities formula shows you whether or not your core business activities are successful. If your company generates a positive cash flow from operations, you may be able to fund expansion projects, launch new products, pay dividends, reduce debt, and so on.

The amount of money a company earns from ongoing, regular business activities such as manufacturing and selling goods or providing a service to customers is referred to as cash flow from operating activities (CFO).

It should be noted that the cash flow from operating activities is calculated thus:

= Operating Income + Depreciation – Taxes + Change in Working Capital

= $500000 + $140000 - $50000 + $28000

= $618000.

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Flathead Lake Manufacturing Company has the following in it's financial statement:

Operating Income = $500000 Depreciation = $140000

Taxes = $50000

Change in Working Capital = $28000

The firm's cash flow from operating activities for 2012 was _______. $749,000$719,000$744,000$618,000

7 0
1 year ago
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