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Ray Of Light [21]
3 years ago
10

Embree Corp. purchased a four-year insurance policy on May 1, Year 2, for $12,000, effective immediately. The company expensed t

he full cost of the policy in Year 2. The correct journal entry for Year 2 (ending December 31) will include a_____________.

Business
1 answer:
BlackZzzverrR [31]3 years ago
6 0

Answer:

a. Debit to Prepaid Insurance of $10,000

* Option for this question was missing so I have attached a similar question with this answer and answered accordingly.

Explanation:

Insurance purchased for four years was actually prepaid insurance on May 1, Year 2.

The company expensed all amount by positing following entry ( which is a wrong entry)

DR.   Insurance Expense  $12,000

Cr.    Cash                          $12,000

It should be entered as follow:

DR.   Prepaid Insurance   $12,000

Cr.    Cash                          $12,000

At the end of the year 2 8 months has been passed for which $2,000 is accrued and it will be recorded, as all the amount is charged to the expense account we will adjusted the remaining amount of $10,000 to correct this mistake.

Now at the end of year 2 the correct entry which will settle the expense and prepaid insurance as well is as follow.

DR.   Prepaid Insurance   $10,000

Cr.    Insurance Expense  $10,000

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Given the following make-buy information, what would be the break-even point?Make Option Buy OptionFixed Costs $15000$1250Variab
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Answer:

d. 2750 units

Explanation:

The break-even point occurs when the make option cost equals the buy option cost. The number of units 'x' needed in order for both options to yield the same costs is given by:

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3 0
3 years ago
A project has cash flows of −$161,900, $60,800, $62,300, and $75,000 for Years 0 to 3, respectively. The required rate of return
Degger [83]

Answer:

Therefore, the internal rate of return is lower than the expected return, for this the project must be rejected

Explanation:

Solution

Given that

The cash flow of a project consists of the following amount from year 0 to 3 = −$161,900, $60,800, $62,300, and $75,000

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At internal rate of return, the value of present inflows is the same as the value of present outflows.

So,

Internal rate of return = Value of present inflows = Value of present outflows

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Therefore, y = internal rate of return 10.41%

7 0
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I would say no. Use a website like Britannica
4 0
2 years ago
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Answer:

True

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The answer to this question is true. The recording of assets is usually done at cost. This is equivalent to the value that was exchanged when the asset was sold. In a country like the United States for example, if an asset such as a land or machine gets to appreciate in value after a period of time, it is not usually revalued. Therefore the answer to this question is true.

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2 years ago
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