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blsea [12.9K]
3 years ago
10

On August 31, 2019, Montana Corporation signed a 4-year contract to provide services for Minefield Company at $30,000 per year.

Minefield will pay for each year of services on the first day of each service year, starting with September 1, 2019. Using the accrual basis of accounting, when should Montana recognize revenue?
Business
1 answer:
masha68 [24]3 years ago
8 0

Answer:

The answer is: Montana should recognize its revenue equally throughout the year as they provide their services.

Explanation:

The accrual basis of accounting recognizes revenue when earned. This means that Montana Corporation should recognize revenue when its service has been performed, regardless of when those services were paid. That means they should recognize revenue equally throughout the year (every month) as they provide their services.

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Laserscope Inc. is trying to determine the best combination of short-term and long-term debt to employ in financing its assets.
snow_lady [41]

Answer:

Laserscope Inc.

Return on Equity (ROE):

= $1,466,400/$18,000,000 * 100

= 8.15%

Explanation:

a) Laserscope's Return on Equity (ROE) is a financial performance measure, calculated by dividing the net income or Earnings After Tax (EAT) by its total shareholders' equity.  It is usually expressed as a percentage.  So the above calculation is further multiplied by 100.

b) Data and Calculations:

Current assets = $16

Fixed assets = $20

Total assets = $36

Debt ratio = 50%  of $36 million = $18 million

Therefore, Stockholders' equity = 50% (1 - 50%) or $18 million

EBIT = $4.1 million

Short-term debt = $6 million

Long-term debt = $12 million

Interest on short-term debt = $420,000 (7% * $6 million)

Interest on long-term debt = $1,236,000 (10.3% * $12 million)

Total interest expense = $1,656,000

Earnings before interest and taxes = $4,100,000

Interest expense                                   1,656,000

Earnings before taxes                          2,444,000

Company tax (40%)                                (977,600)

Earnings after taxes (EAT)                 $1,466,400

7 0
3 years ago
DAR Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under P
Eddi Din [679]

Answer:

a) Share price of company is $28.20.

b) So value of unlevered firm is $4.512 million.

Explanation:

a.

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= $28.20

Share price of company is $28.20.

b.

VAlue of all equity firm = Number of share outstanding × Price per share

= 160,000 × $28.20

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Value of levered firm is $4.512 million.

Since tax rate is zero, so value of levered firm equal to value of unlevered firm.

So value of unlevered firm is $4.512 million.

6 0
3 years ago
EB12.
mote1985 [20]

Answer:

The cost assigned to Job 7 at the end of the week is 5,700 dollars.

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4 0
3 years ago
If i don't talk for awhile can i learn how to talk in a girl voice
Alex
What kind of absurd logic is that? 

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Which of the following is not true of a budget
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I believe the answer is B

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