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nirvana33 [79]
3 years ago
7

The Laramie Company operates a consulting practice. New clients are required to pay the firm in two transactions. First, clients

must pay $200 before receiving consulting services. Second, clients must pay $1,800 once the consulting firm finishes providing services to the client. How does The Laramie Company account for the second transaction?
a. Debit the Cash account for $200 and credit the Unearned Revenue account for $200.
b. Debit the Cash account for $2,000 and credit the Service Revenue account for $2,000.
c. Debit the Cash account for $200 and credit the Prepaid Service account for $200.
d. Debit the Cash account for $1,800, debit the Unearned Revenue account for $200, and credit the Service Revenue account for $2,000.
e. Debit the Cash account for $200, debit the Prepaid Service account for $1,800, and credit the Service Revenue account for $2,000.
Business
1 answer:
ch4aika [34]3 years ago
3 0

Answer:E

Explanation:Debit the cash account for $200, Debit the prepaid service account for $1,800 and credit the service Revenue account for $2,000

with the above breakdown, we have been able to account for the 2 payment tranches that comprises the sales/ revenue per client.

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Task Environment

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When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has been reached?.
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the condition that has been reached is market equilibrium.

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Estimate the value of a share of Intel common stock using the residual operating income (ROPI) model as of December 25, 2010; as
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Using

F=P(1+i)^n equation

we will have

n=5 years

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Ted Jones owns rental properties in Texas. Each property has a property manager, who collects the rent once per month, arranges
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Answers explained below

Explanation:

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2) To avoid the theft of cash, the internal controls requires a through checks of the receipt and payments in the cash book must be compared with the cash receipts and cash payments by the bank in their bank statement.

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Determine the combined present value as of December 31, 2021, of the following four payments to be received at the end of each o
Alenkasestr [34]

Answer:

The question is incomplete, see the complete question below:

Determine the combined present value as of December 31, 2021, of the following four payments to be received at the end of each of the designated years, assuming an annual interest rate of 8%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1). Find N as well.

Payment   Year Received

          $

       9,000  2022

9,600  2023

11,200  2025

13,400  2027

Combined present value                        33,313.9

Explanation:

Present Value:The worth today of a sum receivable or payable in the future is called Present Value. It is premised on the concept of time value of money- that $1 today is worth more than $1 tomorrow. Why?

Because of the opportunity to invest; if invested, the $1 of today would earn interest so making it worth more than $1 dollar on the maturity day.

To calculate the present value of a future cash flow, we simply adiscount it using an appropriate discount rate which is the required rate of return. The discount rate is 8% in this question.

We can quickly calculate the Present Value (PV) using this formula:

PV = FV × (1+r)^(-n)

where FV - Future value, r- interest rate- 8%, n- number of years.

We can now apply these concepts to this question:

Year                                                        Present Value

2022  9000  × (1.08)^(-1)                        8,333.3

2023   9,600  ×  (1.08)^(-2)                      8230.5

2025   11,300  ×  (1.08)^(-4)                      8305.8

2027    13,400 ×   (1.08)^(-6)                  <u>   8,444.3</u>

Combined present value                        <u>33,313.9</u>

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