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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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3 years ago
Looking forward to next year, if Baldwin’s current cash balance is $20,201 (000) and cash flows from operations next period are
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Answer: Purchases assets at a cost of $15,000 (000)

Explanation:

Out of the 4 options presented, 2 involves cash coming into the company which are; Sells $5,000 (000) of their Long-term assets and Liquidates the entire inventory. As these 2 bring cash into the company, they will not make Baldwin need an emergency loan.

The other 2 however, take money from the company being; Retires $20,000 (000) in long-term debt and Purchases assets at a cost of $15,000 (000). Retirement of long-term debt will have been in the budget for a long time so there would be no need for <em>emergency</em> funding.

The Purchase of the assets on the other hand has a less chance of being budgeted for than the long term debt retirement and being such a significant outflow, could expose Baldwin to the risk of needing to seek emergency loans.

4 0
3 years ago
Sierra offers to sell Alyssa a Scottish terrier puppy for $800. Alyssa and Sierra do not discuss the dog’s ancestry, but Alyssa
lisabon 2012 [21]

Answer:

Probably not, because Alyssa made a mistake about the dog's value, not a mistake about material fact.

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When Sierra offered to sell the dog to Allysa, Allysa failed to discuss the ancestry of the puppy. She wrongly believed the dog came from a line of champions.

On finding out the dog is only worth $200, she will not be able to rescind the contract because the onus to ask all relevant questions about the purchase before accepting is on her.

She made the mistake of assuming the dog was worth $800. She made a mistake about the dog's value and not the material fact.

7 0
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The term scrum turned into selected by the paper's authors because it emphasizes teamwork.

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7 0
2 years ago
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Answer: The expected loss is $2.3

Explanation:

Total number of tickets to be sold = 100 tickets

one $450 prize, the expected gain = 450 x (1/100)  = $4.5

two $110 prizes, the expected gain = 110 x (2/100) = $2.2

four $25 prizes. the expected gain = 25 x (4/100) = $1

Expected gain (loss) = Total expected gain - Cost of the ticket

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                                  = (2.3)

The expected loss is $2.3

5 0
3 years ago
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