Answer:
a. Cash basis - Service revenue is $900
b. Accrual basis - Service revenue is $2,100 (which is $1200 + $900)
Explanation:
In accounting, there are 2 basis for recognizing transactions; these are cash basis and accrual basis.
In cash basis, sales and expenses are not recorded unless cash has been collected and paid respectively. In the accrual basis of accounting, expenses and sales are recorded when incurred and earned respectively.
Revenue earned under the accrual basis would therefore include the revenue for which cash has been collected and those for which cash is yet to be collected.
Answer:
Net operating income= 341,000
Explanation:
We need to use the following structure:
Gross profit= sales - cost of goods sold
Net operating income= Gross profit - other expenses (variable and fixed)
<u>Under the absorption costing method, the cost of goods sold incorporates the fixed overhead.</u>
Sales= 980,000
COGS= (116,000 + 266,000)= (382,000)
Gross profit= 598,000
Fixed selling and administrative costs= (116,000)
Variable selling and administrative costs= (141,000)
Net operating income= 341,000
<span>Entrepreneurs are considered to be both spark plugs and catalysts of the free enterprise economy because of a number of reasons. Everybody benefits and profits when an entrepreneur becomes successful. When an entrepreneur opens his or her search for profits, the effects would be a chain of events where new products, greater competition, more production, higher quality, and lower prices for consumers can be observed. An entrepreneur is said to be a spark plug in the free-market for there is that vision of providing a product or a service that people are willing to pay for, combined with the ability to produce that product or service at a cost below the market sales price which propels him/her to take action. Capitalism will not work if it were not for the entrepreneurs who take the risks and start the businesses that produce the goods and services we all enjoy.</span>
An insurance policy with a higher premium most likely has a lower deductible
Answer:
$9.00.
Explanation:
The computation of the value of a put option is shown below:
Data provided in the question
Current price of the stock = $50
Risk free rate = 6%
Strike price = $55
Sale price = $7.20
Based on the above information
The value of put option is
Put = V - P + X exp(-r
t)
= $7.20 - $50 + $55 e
RF - 0.06(1)
= $7.20 - $50 + $51.80
= $9.00
Hence, the value of put option is $9
