All categories

3 years ago

Harley's insurance company needs to record its revenue for the last month. the company should include service revenues on the

1 answer:

6 0

The company should include service revenue on the income statement as gross increase in stockholders' equity.
Service revenue refers to the operating revenue account and it includes all the works that have been fully executed.

You might be interested in

Machines A and B are mutually exclusive and have the following investment and operating costs. Machine A has a life of 3 years w

olganol [36]

Answer:

$-1081.01

$-2536.89

Explanation:

Equivalent annual cost method is a capital budgeting method used to choose between two projects with an unequal life span

The decision rule is to choose the product with the higher Equivalent annual cost

Equivalent annual annuity method is better for making this decision because if net present value is used, the project with the higher useful life would be chosen. this does not mean it is more profitable

EAA = $\frac{r(NPV)}{1 - \frac{1}{(1+ r)^{n} } }$

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

Machine A

Cash flow in year 0 = - $5,000

Cash flow in year 1 = $800

Cash flow in year 2 = $900

Cash flow in year 3 = $1,000

I = 9%

NPV A = -2736.35

Machine B

Cash flow in year 0 = -$6,000

Cash flow in year 1 = $850

Cash flow in year 2 = $900

I = 9%

NPV B = -4462.67

EAA =

(0.09 x -2736.35) / ( 1 - (1.09)^3) = $-1081.01

(0.09 x -4462.67) / ( 1 - (1.09)^2)= $-2536.89

3 0

3 years ago

Consider a Caribbean cruise route served by two cruise lines, Carnival and Royal Caribbean. Both lines must choose whether to c

Naddika [18.5K]

Answer:

Joint profits are maximized when Carnival picks $260 and Royal Caribbean picks $260.

Explanation:

Royal Caribbean

high price low price

$9,000 / $14,720 /

high price $9,000 $1,620

Carnival

low price $1,620 / $8,320 /

$14,720 $8,320

Carnival's dominant strategy is to charge a low price ($260) because it yields the highest profits = $14,720 + $8,320 = $23,040.

Royal Caribbean's dominant strategy is to charge a low price ($260) because it yields the highest profits = $14,720 + $8,320 = $23,040.

Since both companies have the same dominant strategy, a Nash equilibrium exists when they both charge a low price ($260).

7 0

4 years ago

A nonprofit organization aids the unemployed by supplementing their incomes by $5,000 annually, while they seek new employment s

BARSIC [14]

Answer:

100

Explanation:

Calculation to determine How many individuals can receive financial assistance this year

Using this formula

Numbers of individuals=Total budgeted appropriation-Fixed costs/Incomes

Let plug in the formula

Numbers of individuals=700,000-200,000/5000

Numbers of individuals=500,000/5000

Numbers of individuals=100

Therefore How many individuals can receive financial assistance this year will be 100

5 0

3 years ago

Michael’s Bakery had $236,400 in net fixed assets at the beginning of the year. During the year, the company purchased $53,200 i

alexdok [17]

Answer:

$270,300

Explanation:

Given that,

Net fixed assets at the beginning of the year = $236,400

New equipment purchased = $53,200

Old equipment sold = $22,000

Book value of old equipment = $5,900

Depreciation expense for the year = $13,400

The value of new equipment purchased added to the fixed assets, the book value of the old equipment and the depreciation expense are deducted from the fixed assets.

The sale of old equipment and depreciation expense reduces the net fixed assets, that's why it is deducted from the net fixed assets.

Net fixed assets at the end of the year:

= Beginning net fixed assets + Value of new equipment - Book value of the old equipment sold - Depreciation expense

= $236,400 + $53,200 - $5,900 - $13,400

= $270,300

6 0

3 years ago

Wenjing purchases a bond for $2,000 with 12 remaining $40 quarterly coupon payments. The bond broker who sells her the bond reas

egoroff_w [7]

Answer:

Wenjing

The par value that would result in the return the bond broker promises is:

= $1,333.

Explanation:

a) Data and Calculations:

Bond amount paid = $2,000

Quarterly coupon payments = $40

Remaining coupon payments = 12

Bond maturity period = 3 years (12/4)

Promised returns per quarter = 3%

Par value of bond = Quarterly premium/Quarterly returns in percentage = $1,333 ($40/0.03)

Check: 3% of $1,333 = $40

This implies that the bond's annual interest rate = 12% (3% * 4)

8 0

3 years ago