Answer:
Revenue is understated by $1520
Profit is understated by $1520
Accounts receivable is understated by $1520
Retained earnings is understated by $1520
Explanation:
The guideline on recognition of revenue is accrual basis of accounting, which is that revenue is recognized when it has been earned, in other words when the business has discharged its obligation to the other party by a way of delivering goods or services to clients.
Specifically,by not recording an adjusting for the $1520 revenue earned but not yet received,the revenue for the period would be understated by $1520 as well as profit for the year.
Also,asset,accounts receivable would also be understated by $1520 including retained earnings at the end of the year
Answer:
4.65%
Explanation:
Data provided in the question:
Amount borrowed = $18,000
Discount Interest rate = 4% = 0.04
Required compensating balance = 10%
Now,
Effective loan rate on Discount Loan with compensating balance is given as
⇒ [ ( Interest rate ) ÷ (1- interest %-Compensating balance%) ] × 100%
⇒ [ 4% ÷ ( 1 - 4% - 10%) ] × 100%
⇒ [ 0.04 ÷ ( 1 - 0.04 - 0.10 ) ] × 100%
⇒ [ 0.04 ÷ 0.86 ] × 100%
⇒ 4.65%
Answer:
Parson would recognize an interest revenue of $1375
Explanation:
The quoted interest rate on bond is the annual rate of interest. The bond is for 3 months which means that the interest revenue will be recorded for the 3 months period from June to August and the bond will mature on 31 August.
The interest revenue to be be recorded on this note is,
Interest Revenue = 55000 * 0.1 * 3/12 = $1375
The entry to record the receipt of interest and face value will be,
Cash 56375
Interest revenue 1375
Bonds Receivable 55000
Answer:
<em>The difference between </em><em><u>simple</u></em><em> interest and compound interest is that the amount of compound interest earned gets (bigger or smaller) </em><em><u>bigger</u></em><em> every year.</em>
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<em>What</em><em> </em><em>is </em><em>simple</em><em> </em><em>interest?</em>
<em>Simple interest. Money paid only on principal, or money borrowed or invested.</em>
<em>What</em><em> </em><em>is </em><em>compound </em><em>interest?</em>
<em>T</em><em>he </em><em>interest </em><em>which </em><em>is </em><em>a</em><em>dded </em><em>to </em><em>the </em><em>initial </em><em>investment</em><em>,</em><em> </em><em>so that this will gain interest in subsequent time periods.</em>
Answer:
Break-even point in units= 14,000 units
Explanation:
Giving the following information:
Selling price= $60
Variable costs are $30 per unit
Fixed costs total $120,000.
Desired profit= $300,000
<u>To calculate the number of units to be sold, we need to use the following formula:</u>
Break-even point in units= (fixed costs + desired profit)/ contribution margin per unit
Break-even point in units= (120,000 + 300,000) / 30
Break-even point in units= 14,000 units
