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mrs_skeptik [129]
3 years ago
14

Hercules Workout World gains a client who prepays $ 660 for a package of six physical training sessions. Hercules Workout World

collects the $ 660 in advance and will provide the training later. After four training​ sessions, what should Hercules Workout World report on its income statement assuming it uses the accrual basis accounting​ method? A. Service revenue of $ 660 B. Cash of $ 220 C. Unearned service revenue of $ 440
Business
1 answer:
Sergeu [11.5K]3 years ago
8 0

Answer:

Service revenue of $ 440

Explanation:

When the customer prepays, the revenue is yet to be earned hence the entries required would be a debit to cash account and a credit to unearned or deferred revenue.

As the service is rendered and revenue is earned, debit the deferred revenue account and credit the revenue account with the amount earned.

Since $660 was collected for 6 training sessions

Revenue from a training session

= 1/6 × $660

= $110

After 4 training sessions, revenue earned and to be recognized in the income statement

= 4 × $110

= $440

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Mueller Company sold merchandise costing $120,000 for $240,000. Mueller estimates that merchandise costing $5,000 will be return
Yanka [14]

Answer:

The answer is $230,000

Explanation:

Net sales is the sum of a company's gross(total) sales minus any returned goods, sales allowances and/or discounts. The total amount of revenue on a company's income statement is the net sales.

Gross sales - $240,000

Merchandise returned - $10,000

Net sales = Gross sales - goods returned

$240,000 - $10,000

= $230,000

7 0
3 years ago
When Coca Cola introduced Coke Zero,this was an example of a _____ strategy.
Paladinen [302]

Answer:

B) product line extension

Coke Zero is an example of Coca Cola expanding their line of products. They are adding in more options for consumers to buy.

7 0
3 years ago
Schonhardt Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its a
QveST [7]

Answer:

a. $16,500

Explanation:

The computation of the total amount of fixed manufacturing cost is shown below;

= Number of units sold & produced × fixed manufacturing overhead per unit

= 5,000 units × $3.30

= $16,500

Hence, the correct option is a.

3 0
3 years ago
Suppose the hot sauce firm cannot reduce the externality without reducing costs. What is a possible next step the government cou
Makovka662 [10]

Create a limit on the maximum no. of bottles the firm can make,

The required details about externality is mentioned in below paragraph.

<h3>How Do Externalities Work?</h3>

An externality is a cost or benefit a producer generates but does not personally bear or receive. An externality can result from the creation or consumption of a good or service and can be both positive and negative.

Externalities happen when creating or consuming a good has an effect on parties who are not involved in the transaction directly. Externalities can be either good or bad. They can result from either production or consumption as well. For instance, simply entering a city center will increase the pollution and traffic for individuals who live there.

to learn about  externality here-

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8 0
1 year ago
Ruiz Co. provides the following sales forecast for the next four months. Sales (units) April 560 May 640 June 590 July 680 The c
kherson [118]

Answer:

<u>Details                                             April       May       June </u>

Unit to be produced                        576        630        608

Explanation:

The production budget For April, May, and June can be prepared as follows:

                                                 Ruiz Co.

                                         Production Budget

                                   For April, May, and June

<u>Details                                                                April       May       June   </u>

Next month's budgeted sales (A)                     640       590         680

Ratio of inventory to future sales (B)                20%      20%         20%

Budgeted ending inventory (C = A * B)             128        118          136

Budgeted unit sales for month (D)                    560       640        590

Req'd units of avail. production (E = C + D)      688        758        726

Budgeted beginning inventory (F)                     112        128          118

Unit to be produced (G = E - F)                        576        630        608

5 0
3 years ago
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