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umka21 [38]
3 years ago
9

An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. By the end of the year, $4

00 had been earned. Demonstrate the December 31 adjusting entry by choosing the correct statement below.
a. Debit Service revenue for $400.
b. Debit Unearned revenues for $400.
c. Debit Unearned revenues for $600.
d. Credit Unearned revenues for $400.
Business
1 answer:
NikAS [45]3 years ago
7 0

Answer:

b. Debit Unearned revenues for $400.

Explanation:

When money is received in advance for a service that is yet to be rendered, the money is accounted for as a liability called deferred or unearned income.

The entries are

Dr Cash

Cr Deferred revenue

when the service is rendered, revenue is said to be earned with the following entries passed

Dr Deferred revenue

Cr Revenue

Hence when $1,000 for services was received on December 1 and was recorded as a liability

Dr Cash   $1,000

Cr Deferred revenue  $1,000

when $400 had been earned

Dr Deferred revenue  $400

Cr Revenue  $400

Option b is right

b. Debit Unearned revenues for $400.

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Motor Proteins

Explanation:

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8 0
3 years ago
Mark's department has hired a marketing manager to help increase the sale of the company’s products. However, he believes that t
blagie [28]

Answer:

Mark should include in the letter to avoid litigation charges:

Specific facts about the consultant that can be verified.

Explanation:

False information, sentiment-hurting statements, or personal opinions about the consultant's character should never be found in formal letters that are meant to offer constructive criticisms.  This means that only specific facts that are verifiable should be included.  Formal letters are not avenues for character defamation.  They are called "formal" because they must stick to specific and relevant official purposes.

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3 years ago
Bradley is sitting on his porch enjoying his very large front yard and drinking a lemonade when Chris, a kid from down the stree
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c implied contract

Explanation:

4 0
3 years ago
Treasury bills are currently paying 7 percent and the inflation rate is 3.2 percent. a. What is the approximate real rate of int
FromTheMoon [43]

Answer:

The real risk free rate is 3.8%

The exact risk-free rate is 3.68%

Explanation:

The interest rate on the Treasury bills is usually a combination of real risk free rate and inflation rate to compensate investors for average inflation in the economy during the instrument lifetime which equals nominal risk-free rate.

nominal risk-free rate = real risk-free rate+inflation rate

nominal risk-free rate=7%

inflation rate=3.2%

real risk-free rate=7%-3.2%

real risk-free rate=3.8%

The exact real risk-free rate can be computed thus:

nominal rate+1=(real risk-free rate+1)*(inflation rate+1)

real risk-free rate=(nominal rate+1)/(inflation rate+1)-1

real risk free rate=(1.07/1.032)-1

real risk-free rate=0.036821705

real risk-free rate=3.68%

5 0
3 years ago
At the start of its fiscal year, a company anticipated producing 300,000 units throughout the year. The annual budgeted manufact
scoray [572]

Answer:

The correct answer to the following question is $36,000.

Explanation:

Given information  -

Units anticipated to be produced - 300,000 units

Variable cost - $150,000

Fixed cost - $600,000

Beginning inventory - 5000 units

Ending inventory  - 7000 units

Income under absorption costing - $40,000

Now under the absorption costing, rate of fixed overhead cost per unit -

Fixed cost / Number of units produced

= $600,000 / 300,000

= $2

In April ( under absorption costing ), the amount of fixed manufacturing overhead cost that was still embedded in ending inventory but were not expense -  

Fixed overhead rate per unit x number of units produced but not sold

= $2 x 2000 ( 7000 units - 5000 units )

= $4000

So when we calculate the operating cost under variable costing this fixed overhead cost wold be subtracted from total income -

$40,000 - $4000

= $36,000 .

6 0
3 years ago
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