Concept explainers
Requirement – 1
Performance obligation:
Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.
Variable consideration:
Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events.
Deferred revenues:
Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
- Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.
To prepare: The
Requirement – 2
To prepare: The journal entry for SR would record on May 31 to recognize May month revenue and any necessary revision in its estimates bonus receivable.
Want to see the full answer?
Check out a sample textbook solutionChapter 6 Solutions
INTERMEDIATE ACCOUNTING <CUSTOM LL>
- Mcqs 11. There are ________________ basic decisions are involved while performing the financial management responsibilities. a. 1b. 2c. 3d. 512. The company’s management has been planning to launch a new project to get the competitive advantage over their competitors. According to the forecasts of their finance and budgeting department total cost they will be required for that project will be approximately Rs. 3.5 Millions. In their annual general meeting, they have decided to utilize their undistributed profits which are available. Which of the financial management the company’s management has taken in annual general meeting?a. Investment Decisionb. Financing Decisionc. Assets Management Decisiond. Both (a) and (b) 13. The company’s cash flows in project A for the accounting year 2013 was not showing positive results. For that the management has conducted a survey to find out the possible reasons for that bad performance. The survey results show that the major reason behind the…arrow_forwardRelevant Costs for Non-Routine Decision Making 309 Exercise 8 (Dropping or Retaining a Segment) Paragon Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Pasig area. Three services are provided for seniors wheels, and housekeeping. In the home nursing program, nurses visit seniors on a regular basis to check on their general health and to perform tests ordered by their physicians. The meals on wheels program delivers a hot meal once a day to each senior enrolled in the program. The housekeeping service provides weekly housecleaning and maintenance services. Data on revenue and expenses for the past year follow: home nursing, meals on - Home Meals on House- Total Nursing P260,000 120,000 140,000 keeping P240,000 160,000 80,000 Wheels Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed…arrow_forwardata table K Fabulous Fabricators needs to decide how to allocate space in its prod year. It is considering the following contracts: E a. What are the profitability indexes of the projed Data Table b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract A is *** Contract A B C ck on the following icon in order to copy its contents into a spreadsheet.) Use of Facility 100% 60% 40% NPV $1.98 million $1.02 million $1.53 million (Round to two decimal placesarrow_forward
- Q6. A. Define break even analysis. B. Calculate NPV and IRR from data given below Project B $50000 II Year 1 2 3 4 5 Project A $50000 7000 4000 9000 15000 15000 10000 10000 10000 10000 10000arrow_forwardThe Sweetwater Candy Company would like to buy a new machine for $160,000 that automatically “dips” chocolates. The manufacturer estimates the machine would be usable for five years but would require replacement of several key parts costing $10,800 at the end of the third year. After five years, the machine could be sold for $5,000. The company estimates the cost to operate the machine will be $8,800 per year. The present labor-intensive method of dipping chocolates costs $48,000 per year. In addition to reducing costs, the new machine will increase production by 4,000 boxes of chocolates per year. The company realizes a contribution margin of $1.40 per box. A 18% rate of return is required on all investments. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. What are the annual net cash inflows provided by the new dipping machine? 2. Compute the new machine's net present value. Complete this question by…arrow_forwardSolve the newsvendor problem. Probability 0.2 0.1 0.1 0.2 0.3 0.1 Value 1 2 3 4 Purchase cost c 15 Selling price p Salvage value v 25 10 What is the optimal order quantity? Optimal order quantity IL || ||arrow_forward
- work i es aw ill Problem 13-6 (Algo) Coefficient of variation [LO13-1] Possible outcomes for three investment alternatives and their probabilities of occurrence are given next. F1 Failure Acceptable Successful Alternative 1 Alternative 2 Alternative 3 2 F2 W S 7 Using the coefficient of variation, rank the three alternatives in terms of risk from lowest to highest. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Coefficient of Variation 51 Alternative 1 Alternative 2 Outcomes Probability Outcomes Probability 60 0.40 80 0.20 85 0.40 140 0.40 # 3 80 F3 E D 0.40 0.20 Rank $ 4 F4 R DEC 15 F 075⁰ 150 220 % F5 H 0.60 0.10 U 8 F8 A J S 1 F9arrow_forwardQ 9.42: In order to calculate book value, subtract accumulated depreciation from. fair value B market value cost Ab replacement cost Que Di St Study th - Apply de plant asse SUBMIT Confidence A O Mark for Review DELL F11 F12 F8 F10 F9 F5 F6 F7 A 44 & 23 8. 9 3. 4. E R Yarrow_forward11:52 Investment Appraisal (Year 2 Column 2... Project 1 Project 2 Project 3 8. When calculating NPV will using a higher discount factor lead to ...? A higher NPV A lower NPV The same NPV 9. Which method of investment appraisal would be best for a business that has liquidity problems? NPV ARR ... Activity Chat Teams Assignments More 10arrow_forward
- es Problem 13-6 (Algo) Coefficient of variation [LO13-1] Possible outcomes for three investment alternatives and their probabilities of occurrence are given next. Failure Acceptable Successful Alternative 1 Alternative 2 Outcomes Probability Outcomes Probability 0.20 50 0.20 90 80 8.48 185 120 0.40 205 Alternative 1 Alternative 2 Alternative 3 Coefficient of Variation 8.40 8.40 Rank Alternative 3 Outcomes 65 320 420 Using the coefficient of variation, rank the three alternatives in terms of risk from lowest to highest. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Probability 8.20 0.60 8.20arrow_forwardHistory M. Bookmarks Help MopuIM A bbhosted.cuny.edu Given A Concave PPC And l-curve In chegg International Trade is a substitute for: A. Many kinds of government r... 3 T1 V1 SP 2022 - 2022 Spring Term (1)... Remaining Time: 1 hour, 36 minutes, 00 seconds. * Question Completion Status: 15 16 170 20 210 22 10 11 16 35 20 120 13 140 270 28 31 32 33 34 QUESTION 26 Consider the following table for Spain and France in which output for grapes and textiles are output per unit of input: spoo Grapes Spain France 15 8. Textiles France has absolute advantage in the production of 4. 5. (A: grapes; B: textiles; C: both grapes and textiles; D: neither grapes nor textiles,arrow_forwardWhen determining the estimated useful life of an intangible asset which factor is NOT important to consider? Q24 Select one: a. The initial costs incurred in developing the intangible asset. b. The purpose for which the asset will be used and for how long the usage will last. c. Will competitors’ ability to enter the market have an impact on the estimated future demand for the products or the asset? d. With change in management teams, will the new management team be able to manage the asset effectively?arrow_forward
- Pkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE L