Answer: $315000
Explanation:
From the information given in the question, the gross rental income that one will expect to receive for this space in the year after the lease expires goes thus:
= [(75% x 15) + (25% x 18)] x 20,000
= [(0.75 × 15) + (0.25 × 18)] × 20000
= (11.25 + 4.5) × 20000
= 15.75 × 20000
= 315,000
Therefore, the gross rental income is $315000
Answer:
B. Debit Budgetary Fund Balance -- Reserve for Encumbrances for $550,000.
Explanation:
X City made an order for goods worth $550,000 and when the goods were received the invoice states $551,000. The company should indicate in the invoice the correct amount received and work with that.
Reserve for encumbrances is an account that contains funds that have been reserved for a particular purpose. In this case since the order was made in February, the funds of $550,000 would have been put in this account.
On receipt of the goods we debit Budgetary Fund Balance -- Reserve for Encumbrances for $550,000 (the correct value of goods received).
