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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LO 6.5Under absorption costing, a unit of product includes which costs?direct material, direct labor, and manufacturing overhead
direct material, direct labor, and variable manufacturing overhead
direct material, direct labor, and fixed manufacturing overhead
direct material, direct labor, and all variable manufacturing overhead

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Answer: direct material, direct labor, and fixed manufacturing overhead

Explanation: In calculating product cost in a manufacturing environment, there are two types of costing namely the variable costing method and absorption costing method.

Under absorption costing, a unit of product includes direct materials, direct labour, variable overheads and all fixed manufacturing overhead.

under this method, all variable cost as well as fixed cost are all included in the cost of a product.

Absorption costing is required by GAAP and so has to be using in preparing the financial accounts.

Under absorption costing, a unit of product includes all production costs, namely direct material, direct labor, and both variable and fixed manufacturing overhead.

Under absorption costing, a unit of product includes all costs that are involved in the manufacturing process. These costs include direct material, direct labor, and both variable and fixed manufacturing overhead. To elaborate, direct materials are the raw materials used in producing the product, direct labor is the hands-on labor involved in production, and manufacturing overhead consists of indirect costs associated with production such as factory rent, utilities and production manager salaries. Both variable and fixed overhead costs should be included, with the former changing with the level of production and the latter remaining constant regardless of the production volume.

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Local Co. has sales of $ 10.7 million and cost of sales of $ 5.9 million. Its​ selling, general and administrative expenses are $ 550 comma 000 and its research and development is $ 1.2 million. It has annual depreciation charges of $ 1.4 million and a tax rate of 35 %. a. What is​ Local's gross​ margin? b. What is​ Local's operating​ margin? c. What is​ Local's net profit​ margin?

Answers

Explanation:

The computation is shown below:

a. The gross margin is

Gross margin = (Sales revenues - Cost of sales) ÷ (Sales revenues) × 100

= ($10.7 million - $5.9 million) ÷ ($10.7 million) × 100

= 45%

b. The local operating margin is

= (Operating income ÷ Sales) × 100

where,

Operating income is

= (Sales - cost of sales - selling, general & administrative expenses - research & development - Depreciation & Amortization) ÷ (Sales revenue) × 100

= ($10.7 million - $5.9 million - $0.55 million - $1.2 million - $1.4 million) ÷ ($10.7 million) × 100

= ($1.65 million)  ÷ ($10.7 million) × 100

= 15.42%

c. Net profit margin

= (Net profit ÷ Sales) × 100

where,

= (Sales - cost of sales - selling, general & administrative expenses - research & development - Depreciation & Amortization) × (1 - tax rate) ÷ (Sales revenue) × 100

= ($10.7 million - $5.9 million - $0.55 million - $1.2 million - $1.4 million) × (1 - 0.35) ÷ ($10.7 million) × 100

= ($1.0725 million)  ÷ ($10.7 million) × 100

= 10.02%

<11{1[2(06)06]}> Reporter: A new campaign finance reform bill being considered by Congress would limit the amount of campaign contributions that political candidates can receive. However, a survey of candidates running for mayor, governor, and senate seats shows that not one of them favors the bill. Clearly, there is no desire among politicians to limit campaign contributions. Which one of the following points out the flaw in the reporter’s argument above?

Answers

Answer:

d) The views of candidates currently running for office do not necessarily represent the views of all politicians.

Explanation:

The reporter simply transferred the conclusion onto the whole politician cohort. Since only the candidates who are running for high-stake political positions were included in the survey, that does not necessarily mean that all the politicians that exist think the new limit is bad.

To add up, the percentage of politicians that are also the candidates for high positions is significantly smaller than the number of all politicians.

Calculate the WACC for the following data: A company raised $100,000,000. $50,000,000 came from the sale of bonds which have a current yield of 8%. $25,000,000 came from the sale of common stock which has a cost equal to 9%. The final $25,000,000 came from the sale of preferred stock which has a cost equal to 10%. The company's tax rate is 30%.Question 32 options:

A)
7.55%

B)
9.17%

C)
9.00%

D)
8.00%

Answers

Answer:

WACC = 7.55 %

so correct option is A) 7.55%

Explanation:

given data

company raised = $100,000,000

sale of bonds = $50,000,000

current yield = 8%

sale of common stock = $25,000,000

cost equal = 9%

sale of preferred stock =$25,000,000

cost equal = 10%

tax rate = 30%

to find out

WACC

solution

we get here WACC that is express as

WACC = ( Weight of debt × After tax cost of debt) + (Weight of equity × Cost of equity) + (Weight of preferred stock × cost of preferred stock)   ..................1

and cost of debt after tax will be

cost of debt after tax = 8% of ( 1 - 30%)

cost of debt after tax = 5.6%

and Weight of debt = (50000000)/(100000000) = 0.50

and Weight of equity =  (25000000)/(100000000) = 0.25

and Weight of preferred stock = (25000000)/(100000000) = 0.25

so WACC = ( 0.50 × 0.056 ) +  ( 0.25 × 0.09 ) +  ( 0.25 × 0.10 )

WACC = 0.0755

WACC = 7.55 %

so correct option is A) 7.55%

E-Eyes Bank just issued some new preferred stock. The issue will pay a $9 annual dividend in perpetuity, beginning 6 years from now. If the market requires a 6 percent return on this investment, how much does a share of preferred stock cost today

Answers

Answer:

Explanation:

Calculation to determine future sales discounts

Using this formula

Value of Preferred Stock in year 5 =Annual Dividend/Required Rate

Let Plug in the formula

Value of Preferred Stock today =(6/6%)/(1+6%)^5

Value of Preferred Stock today =100/(1+6%)^5

=124.58

Julio Company purchased a $200,000 machine that has a four-year life and no salvage value. The company uses straight-line depreciation on all asset acquisitions and is subject to a 30% tax rate. The proper cash flow to show in a discounted-cash-flow analysis as occurring at time 0 would be:(A) $15,000.
(B) $50,000.
(C) $140,000.
(D) $35,000.
(E) $200,000.

Answers

Answer: The correct answer is "(E) $200,000.".

The proper cash flow to show in a discounted-cash-flow analysis as occurring at time 0 would be: "(E) $200,000.".

Explanation: At time 0, the course of time does not occur therefore there is no discount.