On October 1, a client pays a company the full $12,000 balance of a year-long contract. Using the accrual method, what's the unearned revenue as of December 31

Answers

Answer 1
Answer:

Using the accrual method, the unearned revenue as of December 31 is $12,000.

What is Unearned revenue?

Unearned revenue can be defined as the amount a company received from their client for the service they are yet to rendered.

Since the company has received full balance for the services not yet provided. The unearned revenue as of December 31 will be $12,000 .

Reason been that the amount that the client paid the company is for a year-long contract, hence the $12,000 represent a prepayment amount for the service the company is yet to rendered to their client

Inconclusion using the accrual method, the unearned revenue as of December 31 is $12,000.

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Answer 2
Answer:

The $12,000 payment is for a one-year contract, however, we will only record revenue from October 1 up to December 31 which are the months that already lapsed. The remaining nine months are still considered unearned revenue. Thus, the remaining unearned revenue is $9,000.

Unearned revenue is the amount received from a client for a service that has yet to be rendered. Since the company has received the full balance over the services not yet provided. As of December 31, the unearned revenue will be $12,000.

Because the client paid the company for a year-long contract, the $12,000 represents a prepayment for the service the company has yet to render to their client. Using the accrual method, the revenue that is not earned as of December 31 is $9000.

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Precious CurlsPrecious Curls is a retail chain specializing in​ salon-quality hair-care products. During the​ year, Precious CurlsPrecious Curls had sales of $ 39 comma 388 comma 000$39,388,000. The company began the year with $ 3 comma 500 comma 000$3,500,000 of merchandise inventory and ended the year with $ 4 comma 445 comma 000$4,445,000 of inventory. During the​ year, Precious CurlsPrecious Curls purchased $ 23 comma 350 comma 000$23,350,000 of merchandise inventory. The​ company's selling,​ general, and administrative expenses totaled $ 5 comma 450 comma 000$5,450,000 for the year. Prepare Precious Curls'Precious Curls' income statement for the year.

Answers

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Sales= $39,388,000.

The company began the year with:

$3,500,000 of merchandise inventory

Ended the year with:

$4,445,000 of inventory.

During the​ year:

Purchased $23,350,000 of merchandise inventory.

The​ company's selling,​ general, and administrative expenses totaled $5,450,000 for the year.

First, we need to calculate the cost of goods sold:

COGS= beginning merchandise inventory + purchases - ending merchandise inventory

COGS= 3,500,000 + 23,350,000 - 4,445,000= $22,405,000

Income statement:

Sales= 39,388,000

COGS= 22,405,000

Gross income= 16,983,000

Selling,​ general, and administrative expenses= 5,450,000

Operating income= $11,533,000

Perfect Fit Company sells men's shirts and jeans. The average selling price and variable cost for each product follow: Selling price per shirt $22 Selling price per jean $27 Variable cost per shirt $14 Variable cost per jean $19 Fixed costs $3,200 Calculate the breakeven point in units assuming the sales mix is 1:1.

Answers

Answer:

Jeans= 200 units

Shirt= 200 units

Explanation:

To calculate the break-even point in units, we need to use the following formula:

Break-even point (units)= Total fixed costs / Weighted average contribution margin

Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)

Weighted average contribution margin= (22*0.5 + 27*0.5) - (14*0.5 + 19*0.5)

Weighted average contribution margin= 8

Break-even point (units)= 3,200/8

Break-even point (units)= 400 units

Jeans= 0.5*400= 200 units

Shirt= 0.5*400= 200 units

American express and discover card are examples of open loop systems.
a. True
b. False

Answers

A. True
Btw that's a picture of me.

Paradise Corp. has determined a standard labor cost per unit of $12 (1 hour × $12 per hour). Last month, Paradise incurred 1,900 direct labor hours for which it paid $21,850. The company also produced and sold 1,950 units during the month. Calculate the direct labor rate, efficiency, and spending variances.

Answers

Answer:

Direct Labor Rate Variance = $950

Direct Labor Efficiency Variance = $600

Total Direct Labor Spending Variance = $1,550

Explanation:

Data provided in the question:

Standard labor cost per unit = $12

Direct labor hours = 1,900

Actual Direct labor paid = $21,850

Units sold during the month = 1,950

Standard rate, SR = $12

Now,

Actual rate per unit, AR = $21,850 ÷ 1,900

= $11.5

Direct Labor Rate Variance = ( SR - AR ) × Actual hours

= ( $12 - $11.5 ) × 1900

= $950 ( Favourable )

Direct Labor Efficiency Variance = ( Standard hours - Actual hour ) × SR

= ( 1950 - 1900 ) × $12

= $600 ( favourable )

Total Direct Labor Spending Variance = Standard cost - actual cost

= ( 1950 × 12 ) - 21,850

=  $1,550 (favourable )

Final answer:

To calculate the direct labor rate variance, multiply the standard labor rate per hour by the actual labor hours and subtract the actual labor cost. To calculate the efficiency variance, multiply the standard labor rate per unit by the difference between the actual units produced and the standard units allowed. To calculate the spending variance, multiply the standard labor rate per unit by the difference between the actual labor cost and the budgeted labor cost.

Explanation:

To calculate the direct labor rate variance, we multiply the standard labor rate per hour by the actual labor hours and subtract the actual labor cost. In this case, the standard labor rate per unit is $12, so the actual labor rate is $12. To calculate the efficiency variance, we multiply the standard labor rate per unit by the difference between the actual units produced and the standard units allowed. In this case, the standard units allowed is 1,900 and the actual units produced is 1,950. To calculate the spending variance, we multiply the standard labor rate per unit by the difference between the actual labor cost and the budgeted labor cost. In this case, the budgeted labor cost is $12 per hour and the actual labor cost is $21,850.

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You have purchased 1 million shares in a restaurant chain venture. At this zero-stage investment, your company’s assets are $110,000 plus the idea for your new product. Look back at your restaurant chain venture. Suppose that when you first approach your friendly VC, he decides that your shares are worth only $1.00 each. a. How many shares will you need to sell to raise the additional $1,370,000?
b. What fraction of the firm will you own after the VC investment? (Round your answer to 1 decimal place.)

Answers

Answer:

(a) 1,370,000 shares

(b) 42.19%

Explanation:

Given that,

Shares in a restaurant chain venture = 1,000,000 shares

Price of each share = $1.00

(a) To raise the additional $1,370,000:

Shares will you need to sell:

= Additional amount ÷ Price of each share

= $1,370,000 ÷ $1.00

= 1,370,000 shares

(b) No. of Shares After investment:

= Shares need to sell + Shares in a restaurant chain venture

= 1,370,000 + 1,000,000

= 2,370,000 shares

Therefore, the fraction of the firm will you own after the VC investment:

= (Shares in a restaurant chain venture ÷ No. of Shares After investment) × 100

= (1,000,000 ÷ 2,370,000) × 100

= 0.4219 × 100

= 42.19%

The adjusted trial balance of Sunland Company shows these data pertaining to sales at the end of its fiscal year, October 31, 2022: Sales Revenue $903,400; Freight-Out $13,700; Sales Returns and Allowances $22,000; and Sales Discounts $15,400. Prepare the sales section of the income statement.

Answers

Answer and Explanation:

The preparation of the sales section of the income statement is presented below:

Income Statement

For the year ended

Sales  

Sales revenue  $903,400

Less:  

Sales Discount  $15,400  

Sales return & allowances  $22,000  

Net Sales         $866,000

hence the net sales is $866,000

The freight out would not be considered. Hence, ignored it