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3 years ago

Recognizing something as a revenue instead of as a liability has a positive effect on the reported financial statements because:

Business

1 answer:

Pani-rosa [81]3 years ago

4 0

Revenue and liability has influence on reported financial statements because;

it understates liabilities
it overstates revenues

<h3>What is revenue and liability?</h3>

Revenue serves as the money that is been generated by the company as a profit while a liability serves as future sacrifices of economic benefits.

However, recognizing something as revenue instead of liability is dangerous because it can results in overstated net income.

Learn more about revenue at;

brainly.com/question/25855858

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The warehouse manager at Johnson Cor. is considering installing additional insulation in the warehouse. He estimates that the an

skelet666 [1.2K]

Answer:

9 years

Explanation:

Note: See the attached excel file for the calculation of the cumulative present value (PV).

Annual cost saving = $16,000 - $12,000 = $4,000

With annual cash saving of $4,000 and 12% return on investment (ROI), the cumulative PV of the cash flow from installing the insulation becomes positive in the 9th year at $1,313.

Since the cumulative PV is positive in the 9th year, that means the discounted payback year is 9th year. Therefore, the warehouse have to run for 9 years in order to justify the insulation project.

Note:

The actual discounted payback period is approximately 8 years and 1 month as calculated below:

Discounted payback period = 8 years and ((129.44/1,442.44) * 12) = 8 years and 1 month.

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3 years ago

Four-Nine Corporation issued bonds that pay interest every January 1. The entry to accrue bond interest at December 31 includes

snow_lady [41]

Answer:

b. credit to Interest Payable.

Explanation:

Since the interest has been accrued but not yet paid, it has to be recognized as an increase in expenses and liabilities. The entry would be a debit to Interest Expense and a credit to Interest Payable.

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3 years ago

Blossom Construction Company uses the percentage-of-completion method of accounting. In 2021, Blossom began work on a contract i

Veseljchak [2.6K]

Answer:

Blossom Construction Company

The gross profit that should be recognized in 2021 is:

= $5,500,000.

Explanation:

a) Data and Calculations:

Contract price = $47,500,000

Others:

Billings during the year $21,500,000

Collections during the year $10,500,000

Costs incurred during the year $22,000,000

Estimated costs to complete as of December 31 $16,000,000

Total estimated costs to complete = $38,000,000 ($22 + $16 million)

2021 Revenue = $22/$38 * $47.5 = $27,500,000

Costs incurred during the year = 22,000,000

Gross profit to be recognized = $5,500,000

b) The percentage-of-completion method of accounting for long-term contract measures the percentage of costs incurred in each year against the contract price to determine the revenue which can be attributed to the year.

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3 years ago

An agingminusofminusaccountsminusreceivable indicates that the amount of uncollectible accounts is $3,910. The Allowance for Un

nevsk [136]

Answer:

$3,310

Explanation:

An aging of accounts receivable indicates that the amount of uncollectible accounts is $3,910.

The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $600.

The Accounts Receivable balance is $44,620.

The amount of the adjusting entry for uncollectible accounts should be for: $3,910 - $600 = $3,310

Generally, as a rule - Allowance for Uncollectible Accounts has a credit balance, which will be subtracted from the amount estimated to be uncollectible, to get the amount of the adjusting entry.

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3 years ago

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A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the

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