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masha68 [24]
3 years ago
9

In its first year of operations, Crane Company recognized $29,500 in service revenue, $6,100 of which was on account and still o

utstanding at year-end. The remaining $23,400 was received in cash from customers. The company incurred operating expenses of $15,500. Of these expenses, $12,010 were paid in cash; $3,490 was still owed on account at year-end. In addition, Crane prepaid $2,300 for insurance coverage that would not be used until the second year of operations.
1. Calculate the first year's net earnings under the cash basis of accounting, and the first year's net earnings under the accrual basis of accounting. 2. Which basis of accounting (cash or accrual) provides more useful information for decision-makers?
Business
1 answer:
Montano1993 [528]3 years ago
8 0

Answer: See explanation

Explanation:

1. Calculate the first year's net earnings under the cash basis of accounting, and the first year's net earnings under the accrual basis of accounting.

The first year's net earnings under the cash basis of accounting will be:

Service revenue = $23400

Less: Expenses = $14310

Net income = $9090

The first year's net earnings under the accrual basis of accounting will be:

Service revenue = $29500

Less: Expenses = $15500

Net income = $14000

2. Which basis of accounting (cash or accrual) provides more useful information for decision-makers?

It should be noted that the accrual basis of accounting gives decision makers more useful information. This is due to the fact that the decision makers will probably want to know the revenue and the expenses that were incurred for a particular period and every other necessary details.

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An analyst with a leading investment bank tracks the stock of Mandalays Inc. According to her estimations, the value of Mandalay
V125BC [204]

Answer:

b. Overvalued

Explanation:

Overvalued stocks are securities that trade higher than their fair market value, i.e. the value that the company's fundamentals, such as earnings or revenues justify.

4 0
3 years ago
Compared to other groups, the _______________ generational cohort is more likely to complain, need special attention, and take t
Vinvika [58]

Answer:

<u>Seniors </u>

Explanation:

The seniors generational cohorts refers to the generation that preceded the generation of baby boomers classified as those individuals who were born between 1946 and 1964.

The seniors generation is habitually complaining, something inherited from their witnessing times of wars and periods of uncertainties and financial distress.

This generation commands respect, special attention and at the same time are more miserly in their spending habits.

Also a common observation being, these individuals are not well familiar and adept with technological advancements such as gadgets, systems and modern day appliances in the sense they require more time to get used to them.

5 0
3 years ago
A consumer has $180 in monthly income to spend on two goods, D and G, where D is on the y-axis. The price of good D, PD is $6, a
olga2289 [7]

Answer:

The number of units of good G that can be purchased if all income is used to purchase good G is 15 units.

Explanation:

Since D is on the y-axis, indicating G is on the x-axis, the formula for calculating the marginal rate of transformation (MRT) is given as follows:

MRT = - PG / PD …………………. (1)

Where:

MRT = Marginal rate of transformation = -2

PG = Price of good G = ?

PD = Price of good D = $6

Substituting the relevant values into equation (1) and solve for PG, we have:

-2 = - PG / $6

PG = -2 * (-6) = $12

Therefore, we have:

Number units of good G if all income is spent on it = Monthly income / PG = $180 / $12 = 15

Therefore, the number of units of good G that can be purchased if all income is used to purchase good G is 15 units.

7 0
2 years ago
The sales and profits of an individual product may not follow the life cycle pattern.A. TrueB. False
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Answer:

A. True

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However, due to volatile marketing conditions, it is TRUE, that the sales and profits of an individual product may or may not follow the life cycle of the general pattern.

Hence, the correct answer in this situations is absolutely TRUE

8 0
3 years ago
Holly would like to run an annual major disaster recovery test that is as thorough and realistic as possible. she also wants to
nignag [31]
The option that will be best in this scenario would be a <span>Parallel test. 
In a parallel test, same input will be entered in two different version of simulation.  By doing this, we could create multiple simulations to test several possibilities and reducing the total time needed at the same time. The downside is that this test exposes the tester to a high risk of making a mistake.</span>
7 0
3 years ago
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