If you were an investor in a rent-to-own business that takes more than a year to collect revenues while the customers take immediate possession of the goods: Would you prefer to have the income statement prepared by cash basis or by accrual basis and why

Answers

Answer 1

Answer:

I would prefer cash basis over the accrual bases.

Explanation:

Remember accounting entries are prepared on the basis of Accrual Principle. That is transactions are recognized when they meet the definition and recognition criteria of assets, liabilities, incomes and expenses not when cash is received. Taxable Income calculation follows this accrual principle as well.

This means an will mean that as an investor in a rent-to-own business, i will be taxed more often on the Revenues which are not yet paid for and this will be bad for my liquidity.

I would want to have my cash and pay the taxes when i have actually received cash on my revenues so that i wont run into liquidity problems. This is only possible if the cash basis was to be used.


Related Questions

You make $40,000 per year. You have been offered a promotion and a $5,000 raise per year. Your average federal income tax rate will go up from 10% to 15% per year. Should you take the new job and the raise?

Answers

Answer:

Yes, Accept the new Job and raise

Explanation:

With the old Job, the annual income is $40,000 and a tax rate of 10%.

The annual tax obligation is 10%  of $40,000

=10/100 x $40,000

=0.1 x $40,000

=$4,000

Annual take home is $40,000 -$4,000

=$36,000

With the new salary, the tax obligation will be

Tax rate=15%

Salary =$45,000

=15/100 x $45,000

=0.15 x $45,000

$6,750

The new take home pay is $45,000- $,6750

=$38,250

With the new Job, the take-home pay increases from $36,000 to $38,250.

The new Job and raise should be accepted.

When deciding whether or not to replace old equipment with new equipment, the overriding consideration is the

Answers

Answer: d. difference between future cost savings and the new equipment's costs.

Explanation:

When deciding whether or not to replace old equipment, the main thing the company should be concerned about is if the new equipment is worth it. This worth will be measured by how much it saves for the company over the old equipment vs its cost.

If the cost of the equipment is less than the future savings it will bring in, it should be bought to replace the old equipment because it would be contributing more than it costs. If the reverse is true then it should not be bought.

bruh . (i had to type an extra couple of words because it wouldnt let me send it) im just trying to make people laugh during these tough times. brainly please do not take this down. Thank you remember to social distance, wash your hands, wear masks, be safe, but most importantly have an amazing week!

Answers

thank u!! i needed extra points!

Answer:

oki thank you!!

Explanation:

the answer to life the universe and everything is 42

You are a real estate owner in Bloomington Indiana and you have rented a house to students. You expect to make 6% per year on this leasehold investment. The terms of the lease are for 24 months and the rent is due at the beginning of the month. Your savvy renters are Kelley students and they request that the rent be paid, instead, at the end of the month. How much more will the investor receive as a result of payments at the beginning of the month rather than the student's proposed payments at the end of the month over the entire life of the lease?

Answers

Answer:

The present value of the contract is 0.5% higher if the rent is paid at the beginning of the month. That is equal to $11.28 for every $100 of rent.

Explanation:

if the rent is paid at the beginning of the month, the present value of the lease contract will be:

PV = monthly rent x PV annuity due factor

we are not given the monthly rent, but we know the PV annuity due factor for 0.5% and 24 periods = 22.67568

if the rent is paid at the end of the month, the PV = monthly rent x PV ordinary annuity factor

the PV ordinary annuity factor, 0.5%, 24 periods = 22.56287

assuming that the rent is $100 (just to calculate a %), the PV of an annuity due = $2,267.57

the PV of an ordinary annuity = $2,256.29

the difference between them = [($2,267.57 / $2,256.29) - 1] x 100 = 0.5%

Which diagram arranges the types of business organizations from the most complicated to start to the least complicated to start?

Answers

Answer:

C. Corporation- partnership - Sole Proprietorship

Explanation:

Corporation- partnership—Sole Proprietorship is the diagram arranges the types of business organizations from the most complicated to start to the least complicated to start. Hence, option C is correct.

What is partnership?

Partnership is the deal between the two person or party to start the business, partnership can be legally registered or can also start without the partnership agreement.

In partnership the investment is invested by both the partners that and the profit and loss is divided into equally.

Thus, option C is correct.

For more details about Partnership, click here:

https://brainly.com/question/19988417

#SPJ2

During a six month period, a department had planned sales of $75,000 and planned turnover of 2.6. Using the Basic Stock Method, determine the BOM stock for February, if planned sales for February are $10,500.

Answers

Answer:

the BOM stock is $26,846

Explanation:

The computation of the BOM stock for the feb month is shown below:

But before that following calculations need to be done

Average stock is

= net sales ÷ stock turnover

= $75,000 ÷ 2.6

= $28,846

Now the basic stock is

= Average stock - monthly sales

= $28,846 - ($75,000 ÷ 6)

= $16,346

And, finally BOM stock is

= Planned sales + basic stock

= $10,500 + $16,346

= $26,846

hence, the BOM stock is $26,846

The strengths of a company can only include tangible things.


True

False

Answers

I believe the answer is false due to the fact that people can have strengths in things such as communication.

Answer:

True is the answer cause tangible things  is a physical object that can be perceived by touches such as a building, vehicle, or gadget.

in a market segment approach, which statement below dose not apply​

Answers

where is the statement ??

The bank you own has the following balance sheet: Assets Liabilities Reserves $75 million Deposits $500 million Loans $525 million Bank capital $100 million If the bank suffers a deposit outflow of $50 million with a required reserve ratio on deposits of 10%, what actions should you take

Answers

Answer:

Explanation:

Calculation of the amount of required reserve as follows:

Required Reserve = Deposit * required reserve ratio

= $500 million * 10%  

= $50 million  

Therefore, the bank must hold $50 million in required reserve.

It currently has $75 million in reserve so this requirement is met.

If the bank suffers a deposit outflow of $50 million

         Assets                                 Liabilities

Reserves - $25 million      Deposits - $450 million

Loans - $525 million         Bank capital - $100 million

So the required reserve is $450 * 10/100 = $45 million.

But in the reserve account we have only 25 million so we are falling short of $20 million. We need to maintain this required reserve so we can take following actions:  1. By borrowing $20 millions from other bank or financial institutions or corporations.  2. We can sell securities of $20 million.  3. We can borrow some money and can raise some money by issuing securities.

Walters manufactures a specialty food product that can currently be sold for $21.80 per unit and has 19,800 units on hand. Alternatively, it can be further processed at a cost of $11,800 and converted into 11,800 units of Deluxe and 5,800 units of Super. The selling price of Deluxe and Super are $31.20 and $19.80, respectively. The incremental income of processing further would be:

Answers

Answer:

$51,360

Explanation:

The computation of the incremental income of processing further is shown below:

Given that

Total sales unit before further processing is 19,800 units

And, its sale price per unit is $21.80

So, the total sales price is

= 19,800 units × $21.80

= $431,640

$483000

Now after processing, the sales revenue in both the deluxe and super is

= 11,800 units × $31.20 + 5,800 units × $19.80

= $368,160 + $114,840

= $483,000

So, the incremental net income after further processing is

= $483,000 - $431,640

= $51,360

Pakistan International Airlines is the national flag-carrier of the Islamic Republic of Pakistan. PIA was founded on October 23, 1946 as Orient Airways based in Calcutta (now Kolkata) in British India. In 1955, Orient Airways was nationalized and merged with other airlines to form ‘Pakistan International Airlines.’ In the decades from the 1950s to the 1970s, PIA was ranked amongst the best airlines in the world. This was acclaimed to be the golden era for Pakistan International Airlines when it provided administrative and technical support to many other airlines, including Emirates. Some of the aviation records set by PIA pilots in those days still stand to this day.
Today, PIA is wracked by many administrative and human resource related problems notably corruption, inefficiency, favoritism, nepotism and overstaffing. Safety has also become a major concern after numerous scandals relating to the qualifications of PIA personnel, and the recent crash in Karachi in May, 2020, that killed 97 people.

If you were made the HR manager in PIA, what would you do to improve employee engagement? Be very specific in giving your recommendations. Write 10-15 bullet points.

Answers

Answer:

The HR manager in PIA, what would you do to improve employee engagement is explained below in complete details.

Explanation:

Pakistan International Airlines has been an air journey pioneer since 1955. In PIA, workers are regarded as a necessary asset for the company, so their order is a big obstacle for HR administrators. The largest PIA office is that of Engineering and then comes to other branches like IT, marketing, and finance.

Various Employee engagement ways are:

Employees require feedback, and it defines their level of responsibility. Start by managing check-ins for every operator with their supervisor, supporting middle administration in organizing regular evaluation assemblies with their team as a progressive action to enhance employee engagement.

For a period during which the quantity of product manufactured exceeds the quantity sold, operating income reported under absorption costing will be smaller than operating income reported under variable costing. True False

Answers

Answer:

False

Explanation:

Operating income reported under absorption costing will be smaller than operating income when quantities of products manufactured are less than the quantities sold (Sales > Production). This is because Fixed costs deferred in inventory will be falling and the costs of sales in absorption cost will be rising.

All of the following would have to be reviewed by a principal EXCEPT: A Letters recommending securities to all clients of a registered representative B Complaint letters received from customers C Form letters mailed to all customers D Form letters for internal use within a firm

Answers

Answer:

D Form letters for internal use within a firm

Explanation:

A principal is a shareholder that has 10% or more of the voting shares of a company that is privately held or publicly traded.

Principals take into consideration SEC rules for insider trading.

The principal studies various activities such as Letters recommending securities to all clients of a registered representative, Complaint letters received from customers, Form letters mailed to all customers.

This is done to ensure he makes informed decisions regarding investment.

Usually other shareholders take a cue from investing activities of the principal.

Form letters for internal use do not determine share performance, so it is not reviewed by a principal.

Principal is different from majority shareholder who has 50% of more of voting shares.

Will mark brainly
Martha runs a small travel and tourism business. She, along with her staff, organizes vacations for her clients. Recently, Martha opened a new branch of her business in a different city. She has decided to print new brochures and catalogs that give information about her business. She also plans to mail these brochures to various homes in a location that attracts customers. Which type of promotion does Martha plan to use?
A.
sales promotion
B.
direct marketing
C.
personal selling
D.
advertising
E.
public relations

Answers

Answer:

c

i can't ghshjdhnsjsggsbdn

Answer:

B - Direct Marketing

Explanation:

1. Plato

2. personal selling is meeting face to face. Direct marketing does not invlove interaction with customers. (:

You are considering borrowing $10,000 for 3 years at an annual interest rate of 6%. The loan agreement calls for 3 equal payments, to be paid at the end of each of the next 3 years. (Payments include both principal and Interest.) The annual payment that will fully pay off the loan is?

a. $2,890.

b. $4,020.

c. $2,674.

d. $3,741.​

Answers

Hello! The answer would be D. $3,741. I hope this helps!

Contractionary monetary policy is designed to:
A. reduce long-term interest rates.
B. increase the available money supply.
C. reduce overall economic activity.
D. offer treasury securities for sale.

Answers

Contractionary monetary policy is designed to: C. reduce overall economic activity.

What is a monetary policy?

A monetary policy is also referred to as a fiscal policy and it can be defined as the use of government expenditures (spending) and revenues (taxation), so as to influence macroeconomic conditions such as:

Aggregate Demand (AD)InflationEmployment within a country.

The types of monetary policy.

In Economics, there are two main types of monetary policy and these include the following:

Expansionary monetary policy.Contractionary monetary policy.

Generally, a contractionary monetary policy is designed and adopted by the government to reduce overall economic activity in a particular country.

Read more on monetary policy here: https://brainly.com/question/13926715

reduce overall economic activity.

In planning for your career after high school you should...

I need serious help I NEED to pass this test please HELP

Answers

D I think I'm only in year 7 haha

It’s C. The other person is wrong. Pls mark brainliest. (I’m a senior)

Identify five areas of concern where business standards apply

Answers

Answer:

The government regulates the activities of businesses in five core areas: advertising, labor, environmental impact, privacy and health and safety.

Consumer protection Via Advertising Restrictions. ...

Employment and Labor Protection. ...

Environmental Impact of Business. ...

Date Security and Privacy Protection. ...

Safety and Health.

what is the last step in finding a solution to a problem?
A. choose a solution and try it
B. ignore the problem and it will go away
C. think about ways to solve the problem
D turn the problem into a question

Answers

Answer: d

Explanation: hope it helps

Answer:

Choose a solution and try it.

Explanation:

I just finished this lesson and my answer was correct ;}

The procedure of finding the present values of cash flows expected in the future using the time value concept is called

a.
Money value

b.
Compounding

c.
Stock value

d.
Discounting​

Answers

A. money value

A dollar is always worth more today than it would be worth tomorrow, according to the concept of the time value of money.

During the year, Carolina, Inc. writes off a client's Accounts Receivable of $1,600 because it determines that the receivable is uncollectible. Immediately before the write-off, Carolina has total Accounts Receivable of $120,000 and its Allowance for Doubtful Accounts is $16,000. After the write-off, what is the amount of Carolina's net accounts receivable

Answers

Answer:

the Net accounts receivables after write off is $104,000

Explanation:

The computation of the net account receivable after write off is shown below:

Net accounts receivables after write off is

= (Account receivable - written off) - (Allowance for doubtful accounts - written off)

= ($120,000 - $1,600) - ($16,000 - $1,600)

= $118,400 - $14,400

= $104,000

hence, the Net accounts receivables after write off is $104,000

4. What aspect of project management was omitted from the PMI definition that is included in the definition proposed by Meredith and Mantel

Answers

Answer:

Fulfilling client's expectations

Explanation:

Project management can be defined as the use of skills, tools and knowledge to effectively execute a project.

The Project Management Institute (PMI) aims to develop the project management profession.

PMI definition proposed by Meredith and Mantel has included client satisfaction as a criteria for project success.

Initially client satisfaction was not included in Project Management definition.

According to them project management is the use of skills, tools, and knowledge to meet and exceed customer expectations.

This definition now different from the previous one that focuses on meeting project specifications

What role should government play in a free market economy?

Answers

Economists, however, identify six major functions of governments in market economies. Governments provide the legal and social framework, maintain competition, provide public goods and services, redistribute income, correct for externalities, and stabilize the economy.

Answer: Stabilize the economy

Explanation:

You are graduating from college at the end of this semester and have decided to invest ​$ at the end of each year into a Roth IRA​ (a retirement investment account that grows tax free and is not taxed when it is​ liquidated) for the next years. If you earn percent compounded annually on your investment of ​$ at the end of each​ year, how much will you have when you retire in ​years? How much will you have if you wait 10 years before beginning to save and only make payments into your retirement​ account?

Answers

Answer:

the numbers are missing, so I looked for similar questions:

You are graduating from college at the end of this semester and have decided to invest $5,000 at the end of each year into a Roth IRA, (which is a retirement investment account that grows tax free and is not taxed when it is liquidated) for the next 45 years. If you earn 8 percent compounded annually on your investment of $5,000 at the end of each year, how much will you have when you retire in 45 years? How much will you have if you wait 10 years before beginning to save and only make 35 payments into your retirement account?

We have to determine the future value of an annuity:

FV = annual contribution x FV annuity factor

annual contribution = $5,000

FV annuity factor, 45 periods, 8% = 386.50562

FV = $5,000 x 386.505662 = $1,932.528

if you wait 10 years before starting to save, then the future value will be:

FV = annual contribution x FV annuity factor

annual contribution = $5,000

FV annuity factor, 45 periods, 8% = 172.3168

FV = $5,000 x 172.3168 = $861,584

Your firm has the opportunity to buy a perpetual motion machine to use in your business. The machine costs $1,000,000 and will increase your profits by $75,000 per year. What is the internal rate of return?

Answers

Answer:

7.5%

Explanation:

A forever series formula for the interest rate is  i = A / PV

Annual benefits = $75,000

Present value = $1,000,000

Thus, i = $75,000 / $1,000,000

i = 0.075

i = 7.5%

Therefore, the internal rate of return is 7.5%

You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's cost function is C = 40 + 5Q2. The profit-maximizing output for your firm is

Answers

Answer: Q = 5

Explanation:

In a competitive market, the profit maximising quantity is the quantity at which Marginal Cost is equal to Marginal revenue.

In a competitive market, price is equal to marginal revenue so marginal revenue is $50.

Marginal cost would be the differential of the cost function;

= 40 + 5Q²

= (2 * 5) * Q

= 10Q

10Q = 50

Q = 50/10

Q = 5

A firm has an Inventory turnover (IT) of 5 times a year on a cost of goods sold (COGS) of $800,000. If the firm improves the inventory turnover to 8 times a year while the COGS remains the same, which of the following statements is true?

a $100,000 is additionally invested in purchasing stock.

b. $160,000 is released into the working capital.

C. $60,000 is additionally invested into purchasing stock

d. $60,000 is released into the working​

Answers

Answer:

d. $60,000 is released into the working​

Explanation:

A high inventory indicates that a company sells its stock many times in a year. It means its costs of managing inventory decreases.

The inventory turnover ratio is calculated as below

=Cost of goods sold/ average inventory

If COGS = $800,000 and the inventory turnover ratio =5,

the average inventory will be

=$800,000 /5

=$160,000

With a turnover of 8, and COGS remain $800,000, average inventory will now be

=$800,000/8

=$100,000

The average inventory will decrease to $100,000 from $160,000 previously.

$60,000  will be released to working capital.

Digital Fruit is financed solely by common stock and has outstanding 40 million shares with a market price of $20 a share. It now announces that it intends to issue $310 million of debt and to use the proceeds to buy back common stock. There are no taxes. a. What is the expected market price of the common stock after the announcement

Answers

Answer:

Digital Fruit

The expected market price of the common stock after the announcement is:

$20 per share.

Explanation:

Outstanding number of shares = 40 million

Market price of outstanding shares = $20 a share

Total market capitalization = $800 million

Debts introduced = $310 million

Market capitalization after the debt issue = $490 million ($800 - 310 million)

Number of shares bought back = $310 million /$20 = 15,500,000

Outstanding number of shares after the buy-back = 40 million minus 15.5 million

= 24,500,000 shares

Expected market price of the common stock after the announcement

= $490,000,000/24,500,000

= $20 per share

Which of the following would be part of a financial managers investment decision?

a.
Raising money using equity finance.

b.
Spending money on Capital Expenditure.

c.
Spending money on revenue expenditure.

d.
Borrowing Funds.​

Answers

Answer:

C

Explanation:

Andriel do you remember me​

Answers

Answer:

???????????????????????

Yes do you remember me, Abby?
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