Answer:
Accounts Receivable (Dr.) $87,000
Bonus receivable (Dr.) $29,000
Service Revenue (Cr.) $116,000
Explanation:
Expected Value at contract inception is :
($87,000 * 8 months + $29,000) * 80% = $580,000
($87,000 * 8 months - $29,000) * 20% = $133,400
Total = $713,400
$725,000 / 8 = $89,175
The service revenue is estimated to be 116,000 if there is no probability estimate. When the expected value is incorporated the service revenue will be $89,175.
Answer:
Option A. Debit unrealized holding gain or loss for $400,000 and credit estimated liability on purchase commitment for $400,000.
Explanation:
According to the Accounting Principles losse are always debited and gains are always credited. This means that the notional loss or gain due to the decrease or increase in the value of the contract must be recorded in the current year by debit or credit respectively.
The notional gain or loss at the end of fiscal year, can be calculated by taking the difference of the Agreed value and the current market value of the contract.
The agreed value of the contract is $2,000,000 and the Market Value is $1,600,000, which means that the unrealized losses are $400,000 ($2,000,000 - $1,600,000).
The double entry would be recording the losses of $400,000 due to technologically decrease in the value:
Dr Unrealized Loss $400000
Cr Estimated liability on Purchase Commitment $400000
The answer would be A) True.
Answer: Optimistic
Explanation: Being optimistic is expecting the best from the situation of life. It's a state of mind of always expecting the best out of life and also making the best of what life gives.
Laila is optimistic her idea would succeed, despite a few setbacks she experienced in the business, she still believes her business would be a success. To back up her believe she adds action, investing the resources at her disposal.
The answer will be C. find a way to lower your costs
