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xenn [34]
3 years ago
11

Gomez Company collected $19,200 on September 1, Year 1 from a customer for services to be provided over a one-year period beginn

ing on that date. How much revenue would Gomez Company report related to this contract on its income statement for the year ended December 31, Year 1?
Business
1 answer:
Ksenya-84 [330]3 years ago
5 0

Answer:

$6,400

Explanation:

On December 31, year 1, 4 months has been passed so, the revenue of 4 months should be recognized at this date. The payment was recorded as unearned revenue on September 1 using following entry.

September 1,

Dr. Cash                            $19,200

Cr. Unearned Revenue    $19,200

The revenue account will be credited by the 4 months revenue amount and unearned revenue account will be debited to reduce the amount by the four month accrual.

Total Unearned revenue = $19,200

Revenue for four months = $19,200 x 4/12 = $6,400

You might be interested in
July Networks provides digital television services across the country. They have a cuttingedge technology that provides high-res
Vesna [10]

Answer:

Locking in customers.

Explanation:

July Networks is locking in customers for the next two years by telling them to subscribe with July Networks. This will keep these customers loyal to them for two years, during which they can further implement retention strategies to keep the customers with them more than two years.

This is a good business strategy and customers are attracted to subscribe because of the cutting edge television technology that is being provided by July Networks.

5 0
3 years ago
Read 2 more answers
On January 1, 2021, the general ledger of Big Blast Fireworks includes the following account balances:Accounts Debit Credit Cash
wolverine [178]

Answer:

Big Blast Fireworks

a) General Journal to record transactions:

Jan. 3

Debit Inventory $196,000

Credit Accounts Payable $196,000

To record the purchase of 1,750 units at $112 each

Jan. 8

Debit Inventory $216,450

Credit Accounts Payable $216,450

To record the purchase of 1,850 units at $117 each

Jan. 12

Debit Inventory $237,900

Credit Accounts Payable $237,900

To record the purchase of 1,950 units at $122 each

Jan. 15

Debit Accounts Payable $23,790

Credit Inventory $23,790

To record the return of 195 units at $122 each.

Jan. 19

Debit Accounts Receivable $855,000

Credit Sales Revenue $855,000

To record the sale of 5,700 units on account.

Debit Cost of Goods Sold $657,870

Credit Inventory $657,870

To record the cost of sales of 5700 units.

Jan. 22

Debit Cash Account $837,000

Credit Accounts Receivable $837,000

To record cash receipt from customers.

Jan. 24

Debit Accounts Payable $620,000

Credit Cash Account $620,000

Jan. 27

Debit Allowance for Uncollectible Accounts $2,800

Credit Accounts Receivable $2,800

To record the write-off of uncollectible.

Jan. 31

Debit Salaries & Wages Expense $138,000

Credit Cash Account $138,000

To record the payment of cash for salaries

2. Adjusting Entries on January 31, 2021:

Debit Loss on Inventory $3,190

Credit Inventory $3,190

To record the loss in value.

Debit Allowance for Uncollectible Accounts $2,065

Credit Accounts Receivable $2,065

To record the write-off of uncollectible.

Debit Uncollectible Expense $3,722

Credit Allowance for Uncollectible Accounts $3,722

To bring the allowance for uncollectible accounts to $2,957.

Debit Interest on Notes Payable $245

Credit Interest Payable $245

To record accrued interest for the month

3. Adjusted Trial Balance at January 31, 2021:

                                                  Debit           Credit

Cash                                       $104,700

Accounts Receivable                59,135

Allowance for Uncollectible Accounts          2,957

Beginning Inventory                                    49,000

Ending Inventory                       14,500

Land                                           90,100

Salaries                                    138,000

Loss on Inventory                       3,190

Uncollectible Expense               3,722

Interest on Notes Payable           245

Cost of Goods Sold               657,870

Sales Revenue                                          855,000

Accounts Payable                                       32,260

Notes Payable (6%, due in 3 years)          49,000

Interest on Notes Payable                              245

Common Stock                                          75,000

Retained Earnings                                     57,000

Totals                                 $1,071,462 $1,071,462

Balance Sheet at January 31, 2021:

Assets:

Cash                            $104,700

Accounts Receivable      59,135

Less uncollectible allw.  -2,957

Inventory                         14,500

Land                                90,100

Total  $265,478

Liabilities:

Accounts Payable                             32,260

Notes Payable (6%, due in 3 years) 49,000

Interest on Notes Payable                      245       $81,505

Common Stock                                   75,000

Retained Earnings                             108,973     $183,973

Total $265,478

Explanation:

a)  Unadjusted Trial Balance at January 1, 2021:

                                                  Debit           Credit

Cash                                       $ 25,700

Accounts Receivable                46,000

Allowance for Uncollectible Accounts          4,100

Inventory                                   49,000

Land                                           90,100

Accounts Payable                                       25,700

Notes Payable (6%, due in 3 years)          49,000

Common Stock                                          75,000

Retained Earnings                                     57,000

Totals                                 $ 210,800 $ 210,800

b) Accounts Receivable

Beginning balance     $46,000

Credit Sales             $855,000

less write-off                  -2800

less write-off                 -2,065

less cash receipts  -$837,000

Ending balance          $59,135

c) Estimated uncollectible allowance = $2,957 (5% of accounts receivable balance, i.e $59,135)

d) Uncollectible Expense:

Ending balance       $2957

Plus write-off            2,800

plus write-off            2,065

Beginning balance  -4,100

Uncollectible expense   3,722

e) Cash Account balance:

Beginning balance        $25,700

Cash from customers $837,000

Payment to suppliers-$620,000

Salaries                       -$138,000

Ending balance           $104,700

f) Accounts Payable

Beginning balance    $25,700

Inventory:

     1,750 units for     $196,000

     1,850 units for     $216,450

     1,950 units for    $237,900

      195 units return -$23,790

less payment         -$620,000

Ending Balance        $32,260

g) Income Statement:

Sales                     $855,000

less cost of sales   -657,870

Gross Income         $197,130

Salaries                  -138,000

Loss on Inventory     -3,190

Uncollectible Exp     -3,722

Interest on Note         -245

Net Income           $51,973

Retained Earning  57,000

Ending R/Earnings$108,973

Cost of Goods Sold, using FIFO:

490 units at $100 each       $49,000

1,750 units at $112 each    $196,000

1,850 units at $117 each    $216,450

1,610 units at $122 each   $196,420

7,500 units sold                $657,870

5 0
3 years ago
Why should policies that attempt to create a ladder of opportunity be carried out in the spirit of open-mindedness? Select all t
OverLord2011 [107]

Answer:

b. Such policies have the potential to equalize society.

Explanation:

Open mindedness policy means giving fair and equal opportunity to all and sundry without being bias. When considering open mindedness policy, information is shared to everyone without considering race, religion background or educational qualifications.

Open mindedness accepts people from diverse background and tends to listen first before judging. It also consider opinions from all side without segregation. Although this is the right thing expected but the result is usually not the case.

Unlike close mindednes which restrict information thereby limiting opportunities, open mindedness helps one to learn, unlearn, relearn and grow. It also comes with being honest-thats who you are.

Thus when policy is enacted on open mindedness, it has potentials to equalize the society.

4 0
3 years ago
Lefave, Inc., manufactures and sells two products: Product Q1 and Product D5. Data concerning the expected production of each pr
Travka [436]

Answer:

Predetermined manufacturing overhead rate= $29.59 per direct labor hour

Explanation:

Giving the following information:

Total direct labor-hours 15,755

Total overhead:

Labor-related DLHs= $172,482

Product testing tests= $68,909

General factory MHs= $224,825

Total= $466,216

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 466,216/15,755

Predetermined manufacturing overhead rate= $29.59 per direct labor hour

5 0
3 years ago
Match each of the terms below with their definitions and descriptions
Brums [2.3K]
The answer is B :)))
3 0
2 years ago
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