Answer:
a. Total revenue received:
= 4,500 * 140
= $630,000
Date Account Title Debit Credit
XX-XX-XXXX Cash $630,000
Unearned revenue $630,000
Revenue is unearned because the games have not been played yet therefore Blue Spruce University has not provided the service for which it was paid and has not earned the revenue.
b. The revenue per game is:
= 630,000 / 12 games
= $52,500
Date Account Title Debit Credit
XX-XX-XXXX Unearned Revenue $52,500
Revenue - Ticket Sales $52,500
Answer: e. Reference group
Explanation:
Natasha's friend's are acting as a reference group where she uses their advise (knowledge) to consider her new business.
Answer:
B. $6,000
Explanation:
The computation of the annual depreciation expense under the straight-line method is shown below:
= (Original cost - residual value) ÷ (useful life)
= ($41,000 - $5,000) ÷ (6 years)
= ($36,000) ÷ (6 years)
= $6,000
The original cost is computed below:
= Purchase value + transportation and installation cost
= $40,000 + $1,000
= $41,000
Answer:a The corporation can make a public issue of shares to obtain capital to make the purchase. ( B) The accountant will open a temporary account called the business purchase account and the vendor account to record the purchase
Explanation:
a. When a corporation want to purchase a existing business ,the purchase price may be paid either totally in cash or partly in cash and partly in shares or in some cases totally in shares. The method of payment is arranged between the corporation and the existing business. If the company makes a public issue of shares to raise funds for the purpose of acquisition of the business. A statement in the prospectus to issue the shares that the vendor will be paid either totally or partly in shares boost the investors confidence in the business because they see it as a sign that the vendor has faith in the future prospect of the business under the new ownership. The shares allotted as consideration for the purchase becomes part of the issued capital of the company.
b. The temporary account and the vendor account would include the following
1.Dr the business purchase account
Cr the vendor account
With the agreed purchase price,and the allotment of shares or debenture as part of the purchase price
2. Dr the asset, including Goodwill if any to their respective account,
Cr the total value of asset taken over in one amount to the business purchase account
3. Dr the total value of liabilities taken over in one amount to the business purchase account
Cr the liabilities to their respective account
4. Dr vendor account
Cr the corporation capital account both with the purchase price when paid
Answer:
The statement that is false here is A) trailing P/E ratio are used for valuation because it is based on actual not expected earnings.
Explanation:
For the valuation purposes , the most preferred P/E ratio is forward P/E ratio, not the trailing P/E ratio because here we are more concerned about future earnings not the current. These forwards earnings are the earnings which are expected over the coming year or 12 months of time.