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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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What is the minimum completion cost of this project if there is a penalty of $1000 for each day the project lasts longer than 27
Nitella [24]

Answer:

$27,000

Explanation:

Assuming the minimum cost per day is the same as the penalty for each day the project lasts longer than 27days which is $1,000

Mininum completion cost = 27 × $1,000 = $27,000

4 0
4 years ago
A firm claims on its website that it has been in the same location for over 50 years and has lower overhead than other firms bec
aliina [53]

Answer:

Lower overhead leads to lower prices and higher profit margins. However, fixed costs of acquiring the land are just one of the components of total overhead.

Explanation:

Overhead costs are costs that are not directly associated with running a business, like accounting or legal costs or in this case costs of acquiring land. Since these indirect costs vary and are not the same in every period, they are supposed to be measured monthly. However, small overhead definitely places a business in better position than the competition, as it can charge fewer price for its products and could lead to increase of profit margin. Bought land is just one of the factors that is included in these indirect costs, however if total overhead is really lower, than the firm's claims can be perceived as true.

3 0
4 years ago
don draper has signed a contract that will pay him 80000 at the beginning of each year for the next 6 years plus an additional a
Nata [24]

Answer:

$449,830

Explanation:

A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity.

Don draper will receive total 7 payments in 6 years time.

Formula for Present value of annuity is as follow

PV of annuity = P + P x [ ( 1- ( 1+ r )^-n ) / r ]

P = Payment = $80,000

r = rate of return = 8%

n = number of years = 6 years

PV of annuity = $80,000 + $80,000 x [ ( 1 - ( 1+ 8% )^-6 ) / 8% ]

PV of annuity = $80,000 + $369,830

PV of annuity = $449,830

4 0
4 years ago
When firms are faced with making strategic choices to maximize profit, economists typically use a. the theory of monopoly to mod
stepladder [879]

Answer:

The correct answer is option c.

Explanation:

Game theory is a tool in economics. It helps to understand the situation in cases where rational players interact and act in a strategic manner. For instance in an oligopoly market where there are few firms, which are interdependent.

These firms or producers are rational players who have to decide output and price level in order to maximize their economic profits.

The theory of monopoly can be applied only in case of monopoly market. The cartel theory is applicable if firms have formed a cartel. Aggressive competition model is not always necessary.

So, the correct answer here will be option c.

6 0
3 years ago
Suppose that 10 years ago you bought a home for $110,000, paying 10% as a down payment, and financing the rest at 8% interest fo
skad [1K]

Answer: $11,000

Explanation:

The solution to this problem is not tedious or complicated

Solution;

Amount is = $110,000

Percentage of down payment is given as = 10%

To get the amount of the down payments we find the 10% of $110,00

10% of $110,000 is = 10÷100

=0.1

We multiply it by the amount which is 0.1×110,000= $ 11,000

3 0
3 years ago
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