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VARVARA [1.3K]
3 years ago
6

The accounting department of a large firm is interested in modeling the dynamic of its accounts receivable (that is,the money th

at is owed to it by its customers) when a charge sale occurs,abill is sent out at the end of the month .payment is due within thirty days ,but may not occure in that time.if no payment is received within six months of the billing date,the amount is classified as bad debt.thus,an individual account is described by its age in months,or by "paid" or by "bad debt".For numerical values,assume that the prob. that payment is made in the first month is 0.8 and decline by 0.1 each additional month.that is,the prob.it is paid in the second month is 0.7 ,in the third month is 0.6,and so on. Formulate the terminating Markov chain that describes the debt payment.
Business
1 answer:
Illusion [34]3 years ago
8 0

Answer:

Explanation:

Here is the Markov chain, when the problem says 'terminating' it means that the probability after seven months never changes. After six months

accounting moves it to "bad debt," and, for the purposes of this problem, transistion probabilites end.

Month one: paid 0.8 unpaid 0.2

Month two: paid 0.7 unpaid 0.3

Month three: paid 0.6 unpaid 0.4

Month four: paid 0.5 unpaid 0.5

Month five: paid 0.4 unpaid 0.6

Month six: paid 0.3 unpaid 0.7

Month seven: and above paid 0 unpaid 1.0

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On June 1, 2022, Elite Service Co. was started with an initial investment in the company of $22,100 cash. Here are the assets, l
Helen [10]

Question Completion:

Cash                         $ 4,600

Accounts receivable   4,000

Supplies                      2,400  

Equipment               26,000

Total assets          $37,000

Notes payable       $12,000

Accounts payable        500

Service revenue       7,500

Supplies expense    1,000  

Maintenance and repairs expense  600

Advertising expense  400  

Utilities expense  300

Salaries and wages expense  1,400

Common stock  22,100

In June, the company issues no additional stock but paid dividends of $1,400.

Prepare an income statement, retained earnings statement, and balance sheet.

Check figures:

·         Net income is $3,800.

·         Total assets are $37,000.

·         Total liabilities are $12,500.

Answer:

Elite Service Co.

a) Income Statement for the month of June 30, 2022:

Service revenue                                         $7,500

Supplies expense                           $1,000  

Maintenance and repairs expense    600

Advertising expense                          400  

Utilities expense                                300

Salaries and wages expense         1,400   3,700

Net Income                                              $3,800

b) Retained Earnings Statement for the month of June 30, 2022:

Net Income                     $3,800

Dividends paid                  1,400

Retained Earnings         $2,400

c) Balance Sheet as of June 30, 2022:

Cash                                   $ 4,600

Accounts receivable             4,000

Supplies                                2,400  

Equipment                         26,000

Total assets                    $37,000

Notes payable                 $12,000

Accounts payable                  500

Total liabilities                $12,500

Common stock                 22,100

Retained Earnings          $2,400

Total liabilities + Equity $37,000

Explanation:

Data and Calculations:

Cash                         $ 4,600

Accounts receivable   4,000

Supplies                      2,400  

Equipment               26,000

Total assets          $37,000

Notes payable       $12,000

Accounts payable        500

Common stock       22,100

3 0
3 years ago
According to circus founder p.t. Barnum, what happens without publicity?
Ad libitum [116K]

Answer:

The correct answer would be, Decline in Customers.

Explanation:

P.T. Barnum was a successful American promoter. He founded Ringling Bros. and Barnum & Bailey Circus in 1871. At a young age, he moved to New York and tried a lot of businesses including newspaper publishing and running a boarding house.

He started the circus in 1871 which became a huge success just because of his work plus the tactics of advertisement he used to promote his work. According to him, Decline in the customers happen without publicity. He believed that people will come to see your show only if you have attracted them enough to get them out of their houses and come to see your show through your powerful advertisements.

4 0
3 years ago
Read 2 more answers
Younes Inc. manufactures industrial components. One of its products, which is used in the construction of industrial air conditi
sashaice [31]

Answer:

Contribution margin= $169

Explanation:

<u>First, we need to calculate the total unitary variable cost:</u>

total unitary variable cost= direct material + direct labor + variable overhead + variable selling expense

total unitary variable cost= 38 + 1 + 8 + 4

total unitary variable cost= $51

<u>Now, the contribution margin:</u>

Contribution margin= 220 - 51

Contribution margin= $169

8 0
3 years ago
How can tech companies increase goodwill and indirectly affect profits for parent companies?
Troyanec [42]

Answer:

The only way goodwill can be increased is through the acquisition of another company as a subsidiary. Assume a business acquires a subsidiary for a price that exceeds the total value of the subsidiary's assets.

Explanation:

3 0
3 years ago
Which of the following is true about present value calculations?
Basile [38]

Answer:

The correct answer is letter "B": Other things remaining equal, the present value of a future cash flow decreases if the investment time period increases.

Explanation:

Present Value informs us how much a future sum of money today is worth, given a defined return rate. This is an important financial concept based on the principle that the money received in the future is not worth as much as today's equivalent amount.

For instance, three years from now, $5,000 received is not worth as much as $5,000 received today. If you are investing the $5,000 now, it will be worth more than the original amount assuming a calculated rate of return in two years. Waiting for two years to invest the money is a two-year loss of interest, making the future money worth less than the $5,000 now.

7 0
3 years ago
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