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Dmitry_Shevchenko [17]
3 years ago
13

Jebali Corporation, a calendar year taxpayer utilizing the completed contract method of accounting, constructed a building for S

amson, Inc., under a long-term contract. The gross contract price was $2,300,000. Jebali finished construction in 2019 at a cost of $2,100,000. However, Samson insisted that Jebali redo the doorway; otherwise, the contract price would be reduced. The estimated cost of redoing the doorway is $80,000. In 2020, the dispute is settled and Jebali fixed the doorway at a cost of $65,000. a. How much must Jebali include in gross income
Business
1 answer:
melamori03 [73]3 years ago
7 0

Answer:

Jabeli must include = $2,220,000

Explanation:

As per the data given in the question,

Gross Income in 2019 = $2,300,000 - $80,000

= $2,220,000

So, Jabeli should include $2,220,000 in gross income and Jabeli is allowed to deduct $2,100,000 in 2019

In completed contact method of accounting :

Till the contract is completed and accepted, no revenue from the contract is recognized

In this case the purchaser may desire additional work to be done on a long term contract.

The regulations do not provide any amount of income(or loss) until the dispute is resolved.

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Which of the following statements is true in a capitalist economy?
zepelin [54]

The answer is: b. Markets motivate individual actors to make economic decisions.

In a capitalist economy, the government has very little influence to intervene in the economy. The market is solely controlled by the power of supply and demand. When a lot of people demanded a certain type of products, people who will gain the most profit would be those who are bale to make economic decisions to fulfill the demand in the market.

6 0
3 years ago
Robert Sampson owns a townhouse valued at $185,000 and still has an unpaid mortgage of $150,000. In addition to his mortgage, he
AlexFokin [52]

Answer:

0.31

Explanation:

Given that,

Visa = $ 755

MasterCard = 380

Discover card = 555

Education loan = 3,900

Personal bank loan = 650

Auto loan =  6,000

Total debt  (not including mortgage) = $12,240

Net Worth (not including home) = $39,000

Robert's debt-to-equity ratio:

= Total debt ÷ Net worth

= $12,240 ÷ $39,000

= 0.31

8 0
3 years ago
Three years ago, Vincent Chow completed his degree in accounting. The economy was in a depressed state at the time, and Vincent
m_a_m_a [10]

Answer:

Prerequisite 1  

There are three nonexclusive serious techniques:  

Cost Leadership - target showcase exceptionally broad, point is to have the most minimal cost. Items not specific, attempt to speak to shoppers because of their low costs.  

Separation - items or administrations gave elite highlights that clients need, commonly an increasingly devoted specialty. Ready to charge more significant expenses because of these additional highlights.  

Center Strategy - either a cost authority or a separation methodology, yet focused for a tight, engaged market.  

Vincent's business utilizes a Focus Strategy. The Cappuccino Express was made with the conviction that because of individuals' evolving schedules, comfort would be vital – giving speedy and advantageous espresso to occupied individuals.  

Prerequisite 2  

Basic Success Factors are the vital money related and non-monetary proportions of achievement. To be increasingly explicit Critical Success Factors are features of the association's exhibition that are essential to its upper hand.  

The Cappuccino Express Critical Success Factors :  

Quality and cost of existing items  

Areas specific..near Malls , schools , workplaces and so forth.  

Devise new items at customary interims  

Client Turnover – capacity to keep lines short, vehicles traveling through line  

Keeping Loyal clients with quality items along these lines diminishing ad costs  

Giving incredible client support  

Improving Profitability  

The greater part of these Vincent will have the option to show some power about whether it is adjusting costs, items, guiding various areas or making preparing programs. Then again, if Vincent's essential supposition never again remains constant, regardless of what he does he will most likely be unable to equal the initial investment, not to mention turn a benefit.  

Prerequisite 2  

Vincent needs to leave on numerous assignments in dealing with The Cappuccino Express. To start with, Vincent must blueprint a statement of purpose, objectives, and destinations. As supervisor, Vincent must do statistical surveying. He should get some answers concerning his rivals, clients, and the economy. Additionally, he should utilize a workforce and train them. He should isolate the expenses into assembling costs (direct materials, direct work, and assembling overhead) and non producing costs (selling and managerial expenses). This will take into account monetary observing and precise gauges of benefits, stock, and expenses. Vincent ought to assess both of his areas and conclude whether to remain in business or grow. Additionally, Vincent ought to evaluate his item contributions, administrations, and quality. He can choose which sorts of publicizing (advancements and limits) to offer.

8 0
3 years ago
What is the maximum amount a firm should pay for a project that will return $15,000 annually for 5 years if the opportunity cost
vampirchik [111]

Answer:

The firm should pay $46907.57 for the given project.

Explanation:

Given information:

Return = $15000 annually

Time = 5 years

Opportunity cost = 18%

The formula for payment is

PV=R(\frac{1}{OC}-\frac{1}{OC(1+OC)^t})

where, R is return, OC is opportunity cost, t is time in years.

Substitute R=15000, t=5 and OC=0.18 in the above formula.

PV=15000(\frac{1}{0.18}-\frac{1}{0.18(1+0.18)^5})

PV=46907.5653141

PV\approx 46907.57

Therefore the firm should pay $46907.57 for the given project.

8 0
2 years ago
You observe the following term structure: Effective Annual YTM 1-year zero-coupon bond 5.2 % 2-year zero-coupon bond 5.3 3-year
Lisa [10]

Answer:

Explanation:

a. If you believe that the term structure next year will be the same as today’s, calculate the return on (i) the 1-year zero and (ii) the 4-year zero.

b. Which bond provides a greater expected 1-year return? O 1-year zero-coupon bond O 4-year zero-coupon bond

The return on one year bond is = 5.2%

The price of 4 year bond today

=\frac{ 1000}{ (1.055)^4}

Price of 4 year bond today = 807.22

If yield curves is unchanged, the bond will have 3-year maturity and price will be

=\frac{  1000}{(1.054)^3}

If yield curves is unchanged, the bond will have 3-year maturity and price will be = 854.04

Return

=\frac{ (854.04 - 807.22)}{807.22}

Return = 5.8%

The longer term bond has given the higher return in this case at it's YTM fell during the holding period(4 -year)

8 0
3 years ago
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