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liq [111]
3 years ago
9

On September 1, 2021, Gold Gaming sold 400 one-year subscriptions to its online gaming website for $90 each. The total amount re

ceived was credited to Deferred Revenue. What would be the required adjusting entry at December 31, 2021?
A. Debit Deferred Revenue and credit Service Revenue for $24,000.
B. Debit Deferred Revenue and credit Service Revenue for $36,000.
C. Debit Service Revenue and credit Deferred Revenue for $24,000.
D. Debit Deferred Revenue and credit Service Revenue for $12,000.
Business
2 answers:
ollegr [7]3 years ago
8 0

Answer:

D. Debit Deferred Revenue and credit Service Revenue for $12,000.

Explanation:

The money received in advance before the deliver of the service is recognized in the books by debiting cash account and crediting deferred revenue. As the service is earned, revenue is credited and deferred revenue debited.

Total amount collected = $90 × 400 = $36,000

Monthly revenue = 1/12 × $36,000 = $3,000

Revenue earned between September and December = 4 × $3,000

= $12,000

Entries required

D. Debit Deferred Revenue and credit Service Revenue for $12,000.

wlad13 [49]3 years ago
5 0

Answer:

D. Debit Deferred Revenue and credit Service Revenue for $12,000.

Explanation:

Total Subscription receipt  for one year = 400 x $90 = $36,000

Number of months accrued = December 31, 2021 - September 1, 2021  = 4 months

Revenue accrued = Total Revenue x (Number of Months accrued / 12) = $36,000 x (4/12) = $12,000

So the correct option is D. Debit Deferred Revenue and credit Service Revenue for $12,000.

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A large distributor has 4 retail outlets. Currently each outlet manages its ordering independently. Demand at each retail outlet
Grace [21]

Answer:

a. Units to be ordered to minimize the total cost in the CENTRALIZED system:

= B: 15811 units.

b. Units to be ordered to minimize the total cost in the DECENTRALIZED system:

= E: 5590 units.

Explanation:

a) Data and Calculations:

Demand at each retail outlet = 1,000 per day

Number of days in a typical retail year = 250 days

Total annual demand at each retail outlet = 250,000 (1,000 * 250)

Total annual demand at the distributor = 1,000,000 (250,000 * 4)

Cost of each unit of product = $120

Total cost of product at each retail outlet = $30,000,000 ($250,000 * $120)

Total cost of product at the distributor = $120 million

Holding cost per unit = $14.40 ($120 * 12%)

Ordering cost per order at each retail outlet = $900

Ordering cost per order at the distributor = $1,800 ($900 * 2)

a. Units to be ordered to minimize the total cost in the CENTRALIZED system:

= EOQ = square root of (2 x D x S/H)

where D = annual demand

S = ordering cost

H = Holding cost

= square root of (2 * 1,000,000 * $1,800)/$14.40

= square root of 250,000,000

= 15,811 units

= square root of (2 * 250,000 * $900)/$14.40

= square root of 31,250,000

= 5,590 units

7 0
3 years ago
₥Ɏ ₲Ø₳Ⱡ₴ ₳ⱤɆ ฿ɆⱧł₦Đ ɎØɄⱤ Ʉ₦ĐɆⱤ₴₮₳₦Đł₦₲.
Marysya12 [62]

Answer:

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Explanation:

8 0
2 years ago
Which non-means-tested social welfare program in the united states takes up the largest share of the federal budget?
Phoenix [80]

The biggest and priciest social assistance programmes in America are Social Security and Medicare.

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You can purchase a Medicare Supplement Insurance (Medi-gap) policy from a private insurance provider if you decide to enrol in Original Medicare (Part A and Part B) coverage.

To Learn more about Social Security and Medicare, Click The Links.

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7 0
1 year ago
What is the net present value of a project with the following cash flows if the required rate of return is 9 percent? (round ans
strojnjashka [21]

Answer:

NPV= 5,493.79

Explanation:

<u>To calculate the net present value (NPV), we need to use the following formula:</u>

NPV= -Io + ∑[Cf/(1+i)^n]

Cf1= 18,708 / 1.09= 17,163.30

Cf2= 21,200 / 1.09^2= 17,843.62

Cf3= 17,800 / 1.09^3= 13,744.87

∑[Cf/(1+i)^n]= $48,751.79

NPV= -43,258 + 48,751.79

NPV= $5,493.79

4 0
3 years ago
On July 1, 2018, Crane Company issued for $9450000 a total of 90000 shares of $100 par value, 8% noncumulative preferred stock a
RSB [31]

Answer:

Cash 540,000

Paid-in Capital—Stock Warrants $86,400

Common Stock $360,000

Paid-in Capital in Excess of Par—Common Stock 273,600

Explanation:

The Key to this Question is:

Although the right to purchase the common stock was exercised October 31, 2018. Since the warrant has already been issued July 1, 2018, the 36,000 rights exercised will be calculated and valuated based on prevailing prices on July 1, 2018.

Hence, the Par Value = $10, the purchase price allowed by warrant = $15 and the Market price of the rights to use $2.40

Step 1: Calculate the Cash Amount Received from the exercise of the 36,000 rights

= 36,000 Shares (exercised on October 31, 2018) x $15 ( the Warrant right to purchase common Stock)

= 36,000 x $15

=$540,000 (this is the amount paid for the 36,000 rights exercised)

Step 2: Calculate the Paid in Capital

a. Paid in Capital- Stock Warrants- based on the Market Price of Rights on July 1, 2018

= 36,000 x $2.40 (Market Price of the rights on July 1, 2018)

= $86,400 (This is the value of the 36,000 shares purchased based on the prevailing market price @ July 1, 2018)

b. Calculate Paid in Capital based on the Issued warrant's Par value of One Share of Common Stock when the warrant was issued

= 36, 000 x $10

= $360,000

c. Calculate the Paid-in Capital in Excess of Par—Common Stock

= $360,000 - $86,000

=$273,600 (This is the difference between the par value on July 1, 2018 when the rights were issued and the market price of the rights on that same date).

In summary:

Cash 540,000

Paid-in Capital—Stock Warrants $86,400

Common Stock $360,000

Paid-in Capital in Excess of Par—Common Stock 273,600

5 0
3 years ago
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