Answer:
The amount of revenue recognizable in 2021 is $84000 as shown below
Explanation:
Since the revenue spans over two years,8 months in the year 2021 and the remaining 4 months relate to 2022, the revenue should be recognized on proportional basis.
The revenue in 2021 =total revenue*months in the year/12 months
=$126000*8/12
=$84000
This amount is recorded on monthly basis by crediting revenue with one month sales revenue value $10500($126,000/12) and debiting to deferred revenue.
At the end of the year four months worth of revenue amount would be left in deferred revenue account as revenue for 8 months would have been recognized.
Answer:
d. comparing the additional benefits and costs
Explanation:
The correct choice is D because you are making a choice when the marginal benefits are greater than the marginal costs . At this point, opportunity costs are lowered and you want to get the most out of your resources. It is a point when you are thinking about what an additional action means for you if you take it versus not at all.
Answer:
e. none of the choices.
Explanation:
Based on the scenario being described within the question it can be said that none of the choices are correct because this method focuses on obtaining an order quantity by fixing the quantity for a certain period of time, and calculating the total quantity of Net Requirements within the period. Therefore since the first week and week 4 are missing then none of these are correct, and since the information is not provided by choice answer d. is wrong too.
Answer:
We make use of EBIT (Earnings before Interest and Tax)
Explanation:
Each company has different capital structure (i.e mixture of equity and debt) that gives its weighted average cost of debt. This is depended on the risk profile of the company and macro economic policy prevailing in its jurisdiction.
At the same time, the tax liability of each company differ at different point in time which is depended on the nature of its transactions and the tax laws operating at its jurisdiction.
It is assumed that firm may not have absolute control over all these variables. Hence, in order to ensure that a fair basis is used in comparing similar firms performance, EBIT is always used as a common ground for comparing performance.
