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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The tragedy of the commons suggests that ________.(A) an ongoing process of give and take is based on mutual trust.
(C) mutual trust is based on an ongoing process of give and take.

Answers

Answer:

(A) an ongoing process of give and take is based on mutual trust.

Explanation:

Tragedy of the commons is a situation where individuals in a shared resource system act independently in their own self-interest. They behave in opposition to the common good and deplete shared resources.

In shared resource system there needs to be a collaborative approach between the parties to make sure resources are not exploited.

There needs to be an ongoing process of give and take based on mutual trust to sustain the system.

The concept of the tragedy of the commons has been used in sustainable development, economics, sociology, politics, taxation, and global warming.

A bank estimates that its profit next year is normally distributed with a mean of 0.8% of assets and the standard deviation of 2% of assets. How much equity (as a percentage of assets) does the company need to be (a) 99% sure that it will have a positive equity at the end of the year and (b) 99.9% sure that it will have positive equity at the end of the year

Answers

Answer:

a) 5.45%

b) 6.98%

Explanation:

We are given the following information in the question:

Mean, μ = 0.8%

Standard Deviation, σ = 2%

We are given that the distribution of profit is a bell shaped distribution that is a normal distribution.

Formula:

z_(score) = \displaystyle(x-\mu)/(\sigma)

a) We have to find the value of x such that the probability is 0.99

P(X < x)  

P( X < x) = P( z < \displaystyle(x - 0.8)/(2))=0.99  

Calculation the value from standard normal z table, we have,  

P(z < 2.326) = 0.99

\displaystyle(x - 0.8)/(2) = 2.326\n\nx = 5.452 \approx 5.45

Thus, 5.45% of assets does the company need to be 99% sure that it will have a positive equity at the end of the year.

b) We have to find the value of x such that the probability is 0.999

P(X < x)  

P( X < x) = P( z < \displaystyle(x - 0.8)/(2))=0.999  

Calculation the value from standard normal z table, we have,  

P(z < 3.090) = 0.999

\displaystyle(x - 0.8)/(2) = 3.090\n\nx = 6.98

Thus, 6.98% of assets does the company need to be 99% sure that it will have a positive equity at the end of the year.

Tandy Company was issued a charter by the state of Indiana on January 15 of this year. The charter authorized the following: Common stock, $6 par value, 120,000 shares authorized
Preferred stock, 11 percent, par value $13 per share, 5,000 shares authorized

During the year, the following transactions took place in the order presented:

a. Sold and issued 21,900 shares of common stock at $26 cash per share.
b. Sold and issued 2,800 shares of preferred stock at $30 cash per share.
c. At the end of the year, the accounts showed net income of $41,600. No dividends were declared.

Required:
Prepare the stockholders’ equity section of the balance sheet at the end of the year.

Answers

Answer and Explanation:

The preparation of  the stockholder equity section is presented below:

Tandy Company

Balance Sheet (Partial)  

Stockholders Equity :  

Contributed Capital :  

Common stock (21,900 shares ×  $6) $131,400

Preferred stock (5,000 shares × $13) $65,000

Additional Paid in Capital - Common stock (21,900 shares ×  $20)  $438,000

Additional Paid in Capital - Preferred stock (5,000 shares × $17) $85,000

Total Contributed Capital $719,400

Add: Retained Earnings $41,600

Total Stockholders Equity $761,000

Delivered five rebuilt pianos to customers who paid $14,500 in cash. record the transaction.

Answers

Recording the sales transaction:

It is given that the company delivered five rebuilt pianos to customers who paid $14,500 in cash. It means the company had made cash sales to the customer. To record the cash sales, Cash account is debited and Sales Revenue account is credited. Hence, the journal entry for the sales shall be as follows:


Cash Debit $14,500

Sales Revenue Credit $14,500

(Being goods sold for cash)


Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2018, 300 shares of preferred stock and 3,100 shares of common stock have been issued. The following transactions affect stockholders' equity during 2018: March 1 Issue 1,100 shares of common stock for $33 per share.

May 15 Purchase 400 shares of treasury stock for $26 per share.

July 10 Reissue 200 shares of treasury stock purchased on May 15 for $31 per share.

October 15 Issue 200 shares of preferred stock for $36 per share.

December 1 Declare a cash dividend on both common and preferred stock of $0.80 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)

December 31 Pay the cash dividends declared on December 1.

Donnie Hilfiger has the following beginning balances in its stockholders' equity accounts on January 1, 2018: Preferred Stock, $300; Common Stock, $31; Additional Paid-in Capital, $67,000; and Retained Earnings, $26,000. Net income for the year ended December 31, 2018, is $9,900.

Taking into consideration the beginning balances on January 1, 2018 and all the transactions during 2018, respond to the following for Donnie Hilfiger:

Required:

1. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

2. Prepare the statement of stockholders' equity for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

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Answer:

Explanation:

Attached herewith is a picture that explains all that is needed concerning this question. Thank you and i hope it helps you as you go through

Final answer:

The stockholders' equity section of the balance sheet as of December 31, 2018, shows Preferred Stock: $60,000, Common Stock: $64.00, Additional Paid-in Capital: $125,600, Treasury Stock: ($6,400), Retained Earnings: $ 50,420, and Total Stockholders' Equity: $229,680. The statement of stockholders' equity for the year ended December 31, 2018, shows the effects of the various transactions during the year, including stock issuances, treasury stock purchases and reissues, net income, and cash dividends declared.

Explanation:

Stockholders' equity section of the balance sheet as of December 31, 2018:

  • Preferred Stock: $60,000
  • Common Stock: $64.00
  • Additional Paid-in Capital: $125,600
  • Treasury Stock: ($6,400)
  • Retained Earnings: $50,420
  • Total Stockholders' Equity: $229,680

Statement of Stockholders' Equity for the year ended December 31, 2018:

  • Beginning Balance: $31
  • Additional Paid-in Capital: $125,600
  • Common Stock Issuance: $33,000
  • Treasury Stock Purchase: ($10,400)
  • Treasury Stock Reissue: $6,200
  • Preferred Stock Issuance: $7,200
  • Net Income: $9,900
  • Cash Dividends Declared: ($2,640)
  • Ending Balance: $229,680

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The bonds issued by Stainless Tubs bear a 6 percent coupon, payable semiannually. The bonds mature in 11 years and have a $1,000 face value. Currently, the bonds sell for $989. What is the yield to maturity

Answers

Answer:

The annual YTM will be = 6.133735546% rounded off to 6.13%

Explanation:

The yield to maturity or YTM is the yield or return that an investor can earn on the bond if the bond is purchased today and is held till the bond matures. The formula to calculate the Yield to maturity of a bond is as follows,

YTM = [ ( C + (F - P / n))  /  (F + P / 2) ]

Where,

C is the coupon payment

F is the Face value of the bond

P is the current value of the bond

n is the number of years to maturity

 

Coupon payment = 1000 * 0.06 * 6/12 = 30

Number of periods remaining till maturity = 11 * 2 = 22

semi annual YTM = [ (30 + (1000 - 989 / 22))  /  (1000 + 989 / 2)

semi annual YTM = 0.03066867773 or 3.066867773% rounded off to 3.07%

The annual YTM will be = 3.066867773% * 2 = 6.133735546% rounded off to 6.13%

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