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Bogdan [553]
3 years ago
14

The Maroon & Orange Gym, Inc., uses the accrual method of accounting. The corporation sells memberships that entitle the mem

ber to use the facilities at any time. A one-year membership costs $480 ($480/12 = $40 per month); a two-year membership costs $720 ($720/24 = $30 per month). Cash payment is required at the beginning of the membership period. On July 1, 2017, the company sold a one-year membership and a two-year membership. The company should report as gross income from the two contracts:a. $1,200 in 2017.b. $960 in 2017.c. $180 in 2019.d. $780 in 2018e. None of these.
Business
1 answer:
SashulF [63]3 years ago
4 0

Answer:

c. $180 in 2019

Explanation:

The company uses the accrual method of accounting. Under the method, revenues are reported on the income statement when they are earned, regardless of when the money is actually received or paid.

On July 1, 2017, the company sold a one-year membership and a two-year membership. In 2017, The Maroon & Orange Gym, Inc. has provided service for 6 months of each contracts.

Gross income of one-year membership in 2017 = $40 x 6 = $240

Gross income of one-year membership in 2017 = $30 x 6 = $180

Total income = $240 + $180 = $420

In 2018, the company continued to provide service for 6 months remaining of one-year membership and 12 months remaining of two-year membership.

Gross income of one-year membership in 2018 = $40 x 6 = $240

Gross income of one-year membership in 2018 = $30 x 12= $360

Total income = $240 + $360 = $600

In 2019, the company completed providing service for 6 months remaining of two-year membership.

Gross income in 2019 = $30 x 6= $180

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7. You own a portfolio that has $1,750 invested in Stock A and $3,950 invested in Stock B. If the expected returns on these stoc
I am Lyosha [343]

Answer:

12.46%

Explanation:

Data provided:

Amount invested in Stock A = $1,750

Amount invested in stock B = $3,950

Expected rate of return on stock A = 9%

Expected rate of return on stock B = 14%

Thus,

Expected amount of return on stock A

= Amount invested in Stock A × Expected rate of return on stock A

on substituting the respective values, we have

= $1,750 × 0.09 = $157.5

and,

Expected amount of return on stock B

= Amount invested in Stock B × Expected rate of return on stock B

on substituting the respective values, we have

= $3,950 × 0.14 = $553

Therefore, the total expected return from both the stocks = $157.5 + $553

= $710.5

Now,

the total amount invested = $1,750 + $3,950 = $5700

Hence, the expected rate of return on the portfolio

= \frac{\textup{Total expected retun}}{\textup{Total amount invested}}\times100

on substituting the values, we get

= \frac{710.5}}{5700}\times100

the expected rate of return on the portfolio = 12.46%

7 0
3 years ago
Data on DVD sales for three different years can best be COMPARED by using a *
Jet001 [13]

Answer:

Bar graph (chart).

Explanation:

A bar graph also known as a bar chart can be defined as the graphical representation of data (informations) by using vertical columns or rectangular bars. When a data set is observed, a bar chart can be used to graphically represent or record the total or overall amount of information contained therein. Generally, bar charts are used for the comparison of informations obtained from a data collection by representing each value (information) with rectangular bars respectively.

<em>Hence, data on DVD sales for three different years can best be compared by using a bar graph (chart).</em>

The bar graph has a x-axis and a y-axis used to represent the various categories of data collected. Thus, the x-axis could be used to denote the DVD sales while the y-axis is used to denote the year.

8 0
3 years ago
there are approximately 5.2lbs of muscle for every 7lbs of body weight for a cheetah how much of the weight is muscle on. a 146l
Allushta [10]

Answer:

108.46lbs

Explanation:

5.2:7=x:146

7x = 759.2

<u>7x</u> = <u>759.2</u>

7         7

x = 108.46lbs

alternative way;

5.2/7 = 0.742857142

146 x 0.742857142 = 108.46lbs

4 0
3 years ago
John wants to retire 30 years from now. He doesn’t know how many years he’ll actually live after he retires, so he’d like to sav
m_a_m_a [10]

Answer:

He will need to deposit $267,451.49 each year.

Explanation:

Giving the following information:

John wants to retire 30 years from now.

He’d like to save up enough to spend $60,000 per year forever.

Interest rate= 4% per year.

<u>The $60,000 per year forever is a perpetual annuity. First, we need to calculate the value of the annuity at the retirement age</u>:

PV= Cf/i

Cf= cash flow

PV(retirement)= 60,000/0.04= $15,000,000

He must collect $15 million in 30 years. We need to calculate the annual deposit required to reach the goal:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (15,000,000*0.04)/ [(1.04^30) - 1]

A= $267,451.49

He will need to deposit $267,451.49 each year.

7 0
3 years ago
Cost of preferred stock.  Kyle is raising funds for his company by selling preferred stock. The preferred stock has a par value
anyanavicka [17]

Answer:

7.73%

Explanation:

The computation of the cost of preferred stock is shown below:

As we know that

Cost of preferred stock = {Annual dividend ÷ (price - flotation cost)} × 100

where,

Annual dividend = 6.0% × $100 = $6

Flotation cost = $80 × 0.03 = $2.4

And, the price is $80

So, the cost of preferred stock is

={$6 ÷ ($80 - $2.4)} × 100

= ($6 ÷ 77.6) × 100

= 7.73%

We simply applied the above formula

4 0
3 years ago
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