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Fiesta28 [93]
3 years ago
5

Colbert operates a catering service on the accrual method. In November of year 1 Colbert received a payment of $9,000 for 18 mon

ths of catering services to be rendered from December 1st of year 1 through May 31st of year 3. When must Colbert recognize the income if his accounting methods are selected to minimize income recognition?
Business
1 answer:
Shalnov [3]3 years ago
6 0

Answer:

b) $500 is recognized in year 1 and $8,500 in year 2.

Explanation:

The calculation is shown below:

Since the payment is received for 18 months of $9,000

So for one month, the payment is

= $9,000 ÷ 18 months

= $500

This $500 should be recognized in year 1 and the remaining amount i.e

= $9,000 - $500

= $8,500

This $8,500 should be recognized in year 2

Hence, b option is correct

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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the
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The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions:
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d. $75,000

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                                total         Los Angeles    Bay Area  Central Valley  

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Variable exp.      $410,000        $110,000      $120,000     $180,000

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<u>fixed expenses                                                                                      </u>

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profit margin

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