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3 years ago

Revenues are:

Business

1 answer:

Anton [14]3 years ago

7 0

Answer: Option (C) is correct.

Explanation:

It is the income of the company that is generated from the sales of goods and services or other asset or capital that is used, all of these are associated with the main operation of the companies. This is the income before any deduction of cost or expenses of the company.

Revenue is shown in the profit and loss account and to arrive at the net income then we have to subtract all the costs, charges or expenses from the revenue.

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Aurora Corporation operated without insurance coverage for the first month of 2019. Then, on February 1, 2019, the company paid

Genrish500 [490]

Answer:

Correct answer is letter B, $2,200

Explanation:

Using accrual basis method, revenue and expenses will be recognized when incurred.

The $4,800 is a 24 months policy, therefore we must compute the insurance expense applicable for the year covering from February 1 to December 31 (11 months)

An adjusting entry to recognize the expire portion of the insurance must be done at the year end in the amount of $2,200.

($4,800 / 24 months = $200 x 11 months = $2,200)

3 0

3 years ago

Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2021 are as follows:

Lynna [10]

Answer:

Ending inventory : $868

Explanation:

FIFO (First-In-First-Out) is a method of inventory valuation where the inventory that is received first is sold first. In other words, the earliest inventory is used first. This is common for perishable inventory such as fruits and vegetables which if not used fast, will be wasted.

01/01/21 : Beginning Inventory : 200 units x $5 = $1000

01/15/21 : Purchases : 100 units x $5.3 = $530

01/28/21 : Purchases : 100 units x $5.5 = $550

Total units = 200 + 100 + 100 = 400 units

Units sold = Total inventory available for sale - ending inventory

= 400 - 160 = 240 units.

COGS:

Beginning Inventory : 200 units x $5 = $1000

Purchases : 40 units x $5.3 = $212

Cost of goods sold : $1000 + $212 = $1212

Ending inventory:

Purchases : (100 - 40) units x $5.3 = $318

Purchases : 100 units x $5.5 = $550

Ending inventory : $318 + $550 = $868

6 0

2 years ago

Suppose Latasha comes into a large sum of money and decides to lend it out to earn interest on it. She realizes, however, that e

qwelly [4]

Answer:

moral hazard

Explanation:

Banks reduce the risk of moral hazard when they monitor and supervise how their clients are using the loans and credits made to them.

Some types of credits do not require any type of monitoring or control, e.g. a credit card which a client can use basically however he/she wants to. But other types of credit that are taken for purchasing assets, e.g. a mortgage, must be used by the bank's client to specifically carryout the intended activity.

In economics, moral hazard refers to the tendency that an economic party can engage in unusually risky activities because the capital (money) that they are investing is not theirs and the negative effects of a potential loss will be suffered most by other parties.

5 0

2 years ago

Wendell’s Donut Shoppe is investigating the purchase of a new $40,000 donut-making machine. The new machine would permit the com

oksano4ka [1.4K]

Answer:

initial outlay $40,000

savings per year = $5,200

additional contribution margin = 2,000 x $2.40 = $4,800

machines useful life = 6 years

1) total annual cash flows (assuming no residual value)

Year₀ = -$40,000

Year₁ = $5,200 + $4,800 = $10,000

Year₂ = $10,000

Year₃ = $10,000

Year₄ = $10,000

Year₅ = $10,000

Year₆ = $10,000

2) to determine IRR we can use a financial calculator or the present value of an annuity formula:

PV = annual payment x annuity factor

PV = $40,000

annual payment = $10,000

annuity factor = $40,000 / $10,000 = 4

3) using present value of an annuity table:

we have 6 periods, and we must look for an interest rate that results in an annuity factor of 4 = 13% (the exact annuity factor is 3.998)

using a financial calculator, the IRR = 12.98%, which we can round to 13%

4) the cash flows will be:

Year₀ = -$40,000

Year₁ = $10,000

Year₂ = $10,000

Year₃ = $10,000

Year₄ = $10,000

Year₅ = $10,000

Year₆ = $20,515

We cannot use the annuity formula now because our annuities are not equal. Using a financial calculator, IRR = 16.99%

6 0

3 years ago

You have just purchased a car and, to fund the purchase, you borrowed $25,000. If your monthly payments are $402.18 for the next

Naya [18.7K]

Answer:

E) 4.96%

Explanation:

The computation of the APR could be determined by applying the RATE formula i.e. shown below:

Given that

PMT = $402.18

Present value = $25,000

NPER = 6 × 12 = 72

FUture value = $0

The formula is shown below:

=RATE(NPER;PMT;-PV;FV;TYPE)

After applying the above formula, the annual percentage rate of the loan is

= 0.4135% × 12

= 4.96%

hence, the correct option is E.

4 0

3 years ago