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Anarel [89]
4 years ago
13

On January 1 Revis Consulting enters into a contract to complete a cost reduction program for Green Financial over a six-month p

eriod. Green will pay Revis $20,000 at the end of each month. If total cost savings reach a specific target, Green will pay an additional $10,000 to Revis at the end of the contract, but if total cost savings fall short, Revis will refund $10,000 to Green. Revis estimates an 80% chance that cost savings will reach the target and calculates the contract price based on the probability-weighted amounts of future payments to be received. Revis accounts for this arrangement.
Prepare the following journal entries for Revis:

1. The journal entry on January 31 to record the first month of revenue under the contract.

2. Assuming total cost savings exceed target, the journal entry on June 30 to record receipt of the bonus.

3. Assuming total cost savings fall short of target, the journal entry on June 30 to record payment of the penalty
Business
1 answer:
ipn [44]4 years ago
8 0

Answer:

Explanation:

1. The journal entry on January 31 to record the first month of revenue under the contract.

Dr Cash 20,000

Dr Bonus receivables 1000

    Cr Service revenue 21,000

How to calculate service revenue:

Total savings if the target is achieved = Monthly receipts * period + additional revenue = 20,000*6 + 10,000 = 130,000

Total revenue if the target is not achieved = Monthly receipts * period - additional revenue = 120,000 - 10,000 = 110,000

Monthly revenue = (130,000*0.80 + 110,000*0.20)/6 = 126,000/6 = 21,000

2. Assuming total cost savings exceed target, the journal entry on June 30 to record receipt of the bonus.

Dr Cash 10,000

    Cr Bonus receivables 6,000

    Cr Service revenue 4,000

How to calculate bonus receivables:

Bonus receivables= monthly bonus receivables * period = 1000*6 = 6,000

3.Assuming total cost savings fall short of target, the journal entry on June 30 to record payment of the penalty.

Dr Service revenue 16,000

    Cr Bonus receivables 6,000

    Cr Cash 10,000

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Answer:

d. they have a large cohort of technically skilled university graduates who work for about one-fifth the pay of comparable American workers.

Explanation:

In the context of international trade, India, China, and the Philippines attract multibillion-dollar investments because: they have a large cohort of technically skilled university graduates who work for about one-fifth the pay of comparable American workers.

One of the major attractions of international trade is the exploitation of intellectual property and skills.

In China for example, research has shown that one major reasons why international trade grew was as a result of the number of Chinese workers, and the fact that they produced a sharp, sustained increase in productivity (that is, increased worker efficiency). Not to mention that the cost of labor was far cheaper than in America or Europe.

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________ occurs when price- and quantity-fixing agreements among producers are implicit. A) Tacit collusion B) A Cournot model C
mash [69]

Answer:

The correct to answer to the following question is option A) Tacit collusion .

Explanation:

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3 years ago
If you were the President of the United States, what are some of the changes you would make?
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I'll do minor things which will cause hopefully no major damage…

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8 0
3 years ago
Read 2 more answers
When someone is willing to continue to purchase a good even though its price rises dramatically, the demand for the good is said
ArbitrLikvidat [17]
I would say it's <span> Inelastic. </span>
8 0
3 years ago
You have decided that you want to be a millionaire when you retire in 45 years. If you can earn an annual return of 11%, how muc
bagirrra123 [75]

Answer:

If you earn an annual return of 11%, then you need to invest 9,129.89

If you earn an annual return of 5.5%, then you need to invest 89,875.08

Explanation:

We will calculate the first years in order to try to find a pattern. Let x be the initial investment.

1st year. We have our original amount of money plus the 11% of the original amount.

x + 0.11x = 1.11x

2nd year.  We have the amount of money we had the 1st year plus the 11% of that amount.

1.11*x + 1.11*x*(0.11) = 1.11x*(1+0.11) = 1.11*x*(1.11) = (1.11^2)*x

3d year.

(1.11^2)*x + ((1.11^2)*x)*.11 = (1.11^2)*x*(1+0.11) = (1.11^2)*x*(1.11) = (1.11^3)*x

We can already see a pattern and say that, at year n, we will have:

(1.11^n)x

If we want to have 1,000,000 at age 45, then we just have to write the equation:

(1.11^45)=1 000 000

Solving for x we get that: x = 9,129.89

In an analogous way, we can write an equation for the case when the annual return is 5.5, in the following way:

(1.055^45)=1 000 000

Solving for x we get that: x = 89,875.08

5 0
4 years ago
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