1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Valentin [98]
3 years ago
12

At the beginning of 2016, Gannon Company received a three-year zero-interest-bearing $1,000 trade note. The market rate for equi

valent notes was 8% at that time. Gannon reported this note as a $1,000 trade note receivable on its 2016 year-end statement of financial position and $1,000 as sales revenue for 2016. What effect did this accounting for the note have on Gannon's net earnings for 2016, 2017, 2018, and its retained earnings at the end of 2018, respectively? Group of answer choices : a. Overstate, overstate, understate, zerob. Overstate, understate, understate, understatec. Overstate, overstate, overstate, overstated. Overstate, understate, understate, zeroPLEASE write down the CORRECT general entries for all transactions!!!!
Business
1 answer:
notka56 [123]3 years ago
6 0

Answer:

d. Overstate, understate, understate, zero

Explanation:

The amount of earnings overall is the same. so, in the end, there is n difference in retained earnings.

But, on accrual accounting, the note should not enter the accounting as 1,000 as time value of money exist.

At 2016 the sales revenue should be the present value of 1,000 dollars not the complete 1,000 dollars. Thus, is overstated.

Then, the interest accrued from the note are not recognized. Thus, the first year (2016) recognize revenues that should be matched with 2017 and 2018

Thus, these two subsequent years ended understated.

You might be interested in
John and his wife Martha get a divorce. Per the divorce settlement contract, Martha agrees to pay John alimony in the amount of
OleMash [197]

Answer:

c) the condition subsequent has occurred;

Explanation:

Since in the question it is given that the John and his wife Martha get a divorce and according to the  divorce settlement contract she agrees to pay the alimony to John for $5,000 per month for his lifetime or until that time when he should remarry

If John remarries after three years, so the alimony benefits is ceased because the subsequent condition has occurred due to which he will not get the amount further in the future

7 0
3 years ago
Abigail does not feel that the company is paying her enough money to live on, despite the fact that she works hard. The quality
Yanka [14]

The correct answer is hygiene factors. Hygiene factors is being describe as the job dissatisfaction that an individual feels for the job that he or she is in. The individuals are adequately addressed by this, they are likely not to be dissatisfied or will be satisfied.

5 0
3 years ago
In July 1, 2018, a two-year insurance premium on equipment in the amount of $672 was paid and debited in full to Prepaid Insuran
Helen [10]

Answer:

Income tax expense is $8,250. It is recorded by debiting Income tax expense by $8,250 and crediting Income tax payable by $8,250.

Explanation:

The income tax rate is 25%. Income tax is calculated on the taxable income after all other adjustments have been made.

Note that the question gives an income figure of $33,000. This is stated as the <em>income after the preceding adjustments but before income taxes.</em> Hence, this is the amount on which we calculate the income tax expense as follows.

Income tax expense = Taxable income x Income tax rate

                                  = $33,000 x 0.25

                                  = $8,250

The next requirement is to record the income tax expense in the journal. This income tax has not yet been paid by the company. Therefore, an income tax payable liability is created. The journal entry is as follows.

Debit: Income tax expense $8,250

Credit: Income tax payable $8,250

8 0
3 years ago
On August 1, Year 1, SuperCool Software (SCS) began developing a software program to allow individuals to customize their invest
Bess [88]

Answer:

$180,000

Explanation:

Calculation to determine the required amortization for Year 2

(1)Using Percentage-of-revenue method

Percentage-of-revenue method=($2,000,000/$10,000,000)*$900,000

Percentage-of-revenue method= 20% *$900,000

Percentage-of-revenue method= $180,000

(2) Using Straight-line method

Straight-line method=$900,000 × 1/5 × 9/12

Straight-line method= $135,000

Therefore based on the above calculation the required amortization for Year 2 will be $180,000 using The percentage-of-revenue method reason been that the method help to produces higher amortization of the amount of $180,000.

6 0
3 years ago
Rational and Normative modes of decision making are used. Then intuition or gut feeling also play a role in this process. How do
Anna35 [415]

A manager, making decisions in real-life situations, strikes a balance between these ways to make quick but correct decisions based on systemic organizational vision and conceptual skills.

The manager's experience will help him to make decisions using rational and normative ways, and thus analyze what is the best strategy for effective decision making.

Conceptual skills refer to the manager's systemic view, which understands the organization as an integrated system and must involve a set of thoughts, processing and planning to improve the business.

Therefore, decision making must be taken in a rational and normative way according to the context of the situation that requires a decision, and it is up to the manager to use the best tool to make a decision aligned with the company's objectives and goals.

Learn more here:

brainly.com/question/4382381

5 0
3 years ago
Other questions:
  • John clark works as a land buyer for a city government. after negotiating the purchase of a parcel of land to be used for a new
    9·1 answer
  • Veronica's dress shop marks down a pair of shoes 15% when the customer purchases the shoes with a dress or pantsuit. the sale pr
    15·2 answers
  • Organizations are often divided into units or departments. Which of these is NOT a common way to organize a company?
    13·1 answer
  • On December 15, 2013, Rigsby Sales Co. sold a tract of land that cost $3,600,000 for $4,500,000. Rigsby appropriately uses the i
    13·1 answer
  • Monica quit her $50,000 per year job, purchased a building that was previously rented by the operator of a candy store for $1,50
    12·1 answer
  • Suppose the government wants to help the coffee industry, where many producers earn relatively little. It is considering two pos
    7·1 answer
  • How is everyone's day so far?
    15·2 answers
  • Only ______ segregation produces viable gametes and progeny, which also occurs in about half of meiosis and accounts for semi-st
    6·1 answer
  • Heidi Company is considering the acquisition of a machine that costs $420,000. The machine is expected to have a useful life of
    5·1 answer
  • A document certifying ownership of part of a corporation is a
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!