Answer:
Debit Cash account $15,120
Credit Unearned Service Revenue $15,120
Being entries to record cash collected for service to be rendered.
Debit Unearned Service revenue $1,890
Credit Service Revenue $1,890
Being entries to recognize revenue earned as at 31 December
Explanation:
When an amount is collected in advance for a service yet to be rendered, the company recognizes and asset in form of cash and a liability in form of Unearned Service Revenue.
When the service for which cash was collected is performed, revenue is said to have been earned. Entries required then are debit Unearned Service Revenue Credit Service revenue.
For Mesa, on 1 July , entries required are
Debit Cash account $15,120
Credit Unearned Service Revenue $15,120
Being entries to record cash collected for service to be rendered.
As at 31 December, revenue earned
= 1/2 × $15120/4
= $1890
Entries required
Debit Unearned Service revenue $1,890
Credit Service Revenue $1,890
Being entries to recognize revenue earned as at 31 December
The journal entries and adjusting entries should be shown below.
Cash account $15,120
Unearned Service Revenue $15,120
(Being entries to recordcash collected for service to be rendered)
Unearned Service revenue $1,890 ( 1/2 × $15120/4)
Service Revenue $1,890
( to recognizerevenue earned as at 31 December)
These journal entries should be recorded.
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Complete Question:
Which of the following is an objection of using the Consumer Price Index (CPI) to measure changes in the cost of living?
A. The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.
B. The inflation rate is always understated due to substitution bias.
Answer:
Consumer Price Index (CPI)
A. The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.
Explanation:
To obtain the Consumer Price Index (CPI), a predetermined basket of consumer goods and services is obtained. Weights are assigned to the goods according to their relative values in the basket. The price changes are calculated. The resulting figures are averaged to determine the CPI.
Answer:
The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.
Explanation:
1. Predetermined Overhead Rate ≈ $160.27
2. Hourly Billing Rate for Tara ≈ $245.73
(1) To compute the predetermined overhead rate, we need to calculate the total cost of services (salary plus overhead) for both appraisers and then divide it by the total billable hours.
Total Overhead Costs = $378,210
Total Salary Costs = Salary of Debbie + Salary of Tara = $150,000 + $81,000
= $231,000
Total Billable Hours = Billable hours of Debbie + Billable hours of Tara
= 2,000 + 1,800
= 3,800
Predetermined Overhead Rate = (Total Overhead Costs + Total Salary Costs) / Total Billable Hours
Predetermined Overhead Rate = ($378,210 + $231,000) / 3,800
Predetermined Overhead Rate = $609,210 / 3,800
Predetermined Overhead Rate ≈ $160.27 (rounded to 2 decimal places)
(2) To compute the hourly billing rate for Debbie and Tara, we'll use the formula:
Hourly Billing Rate = (Total Cost of Services + 20% Markup) / Total Billable Hours
For Debbie:
Total Cost of Services for Debbie = Salary of Debbie + (Predetermined Overhead Rate × Billable hours of Debbie)
Total Cost of Services for Debbie = $150,000 + ($160.27 × 2,000)
Total Cost of Services for Debbie = $470,540.00
Hourly Billing Rate for Debbie = ($470,540.00 + 0.20 × $470,540.00) / 2,000
Hourly Billing Rate for Debbie ≈ $282.32 (rounded to 2 decimal places)
For Tara:
Total Cost of Services for Tara = Salary of Tara + (Predetermined Overhead Rate × Billable hours of Tara)
Total Cost of Services for Tara = $81,000 + ($160.27 × 1,800)
Total Cost of Services for Tara = $369,486.00
Hourly Billing Rate for Tara = ($369,486.00 + 0.20 × $369,486.00) / 1,800
Hourly Billing Rate for Tara ≈ $245.73 (rounded to 2 decimal places)
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The predetermined overhead rate is found to be 163.77%, and the hourly billing rates for Debbie and Tara (including a 20% markup) are $237.40 and $142.44, respectively.
To calculate the predetermined overhead rate, we need to divide the total overhead costs by the total salary costs of both appraisers. In this case:
Total Overhead Costs = $378,210
Total Salary Costs = Debbie's Salary ($150,000) + Tara's Salary ($81,000) = $231,000
Predetermined Overhead Rate = Total Overhead Costs / Total Salary Costs = $378,210 / $231,000 = 1.6377 or 163.77%
To calculate the hourly billing rate for each appraiser, you add their salary cost per hour, the overhead cost per hour, and then mark up the total cost by 20%. For Debbie:
Debbie's Salary per Hour = $150,000 / 2,000 hours = $75
Debbie's Overhead per Hour = 1.6377 × $75 = $122.83
Total Cost per Hour for Debbie = $75 + $122.83 = $197.83
Hourly Billing Rate for Debbie (with 20% markup) = Total Cost per Hour × 1.20 = $197.83 × 1.20 = $237.40
Similarly, for Tara:
Tara's Salary per Hour = $81,000 / 1,800 hours = $45
Tara's Overhead per Hour = 1.6377 × $45 = $73.70
Total Cost per Hour for Tara = $45 + $73.70 = $118.70
Hourly Billing Rate for Tara (with 20% markup) = Total Cost per Hour × 1.20 = $118.70 × 1.20 = $142.44
Answer:
Method B should be used
Explanation:
Note: See the attached excel file for the calculation of the present worth of Method A and Method B.
From the attached excel file, we have:
Present worth of Method A = –$210,889.85
Present worth of Method B = –$118,011.18
Since the present worth of Method A and B above imply Method A costs more than Method B, Method B should be used.
Answer:
The government needs to revamp the Social Security program to make it sustainable.
Explanation:
A normative economic statement is always a suggestion for the economy, whereas a descriptive economic statement is a statement providing information, as it states the facts and do not provide any suggestion.
Here, in given instance the statement,
Government needs to improve or form the Social Security Program, so that the program is sustainable, is a suggestion and not a fact.
Thus, it is a normative economic statement.
Among the provided statements, the one suggesting the government needs to revamp the Social Security program to be sustainable is the normative economic statement due to its prescription for improvement.
Normative economics involves judgments and prescriptions for economic policies or outcomes. Among the provided statements, 'The government needs to revamp the Social Security program to make it sustainable' is a normative economic statement. This statement is normative because it is based on value judgments and expresses an opinion on how things should be. It suggests a course of action that ought to be pursued to improve the Social Security program and doesn't merely describe factual aspects of the economy like the rest of the statements do.
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Answer:
True
Explanation:
Prices in a free market co-ordinate the buying and selling decisions in the market. In their rationing role, prices inform the distribution of goods and other resources throughout the economy. Prices motivate firms by acting as incentives that provide a standard of measure of value throughout the world. Prices direct producers and consumers, thereby acting as signals to educate producers and consumers on how to adjust their production and consumption decisions.
b. False
Answer:
The statement is false.
Explanation:
As the market value of the stock depends upon the industry risk, political, economical, technological, etc factors and also largely depends upon the business performance which is the profits generated by the organization and its cashflow health. So higher par value has nothing to do with higher market value. Hence the statement is totally incorrect.