Accounting Answers

What is Accrued service revenue? How is it different from service revenue?

The Government of Pakistan is emphasizing on the consumption of indigenous and environmentally clean energy generation resources. Alternative Energy Development Board (AEDB) is established by the government, responsible for the growth of renewable energy sector; the advancement of alternative and renewable technologies is among one of the top priorities of the government. Several initiatives have been taken to create favorable environment for the sustainable growth of Alternative Renewable Energy (ARE) Sector in Pakistan in order to control and make potential use of indigenous renewable energy resources. Suppose the quantity demanded and quantity supplied functions for renewable energy resources are as given below: Qd = 20,000 - 3P Qs = 15,000 + 2P Where ‘P’ is the price in rupees of a renewable energy resources, ‘Qd’ is quantity demanded for renewable energy resources, and ‘Qs’ is quantity supplied for renewable energy resources.

The demand equation for a good is given by the equation: 

Q = 700 – 2P + 0.02Y 

(Where P is the price and Y is the income). 

Determine the following:

(a). Price elasticity of demand when P = $25 and Y = $500. 

(b). Income elasticity of demand when P = $25 and Y = $500.

(c). Interpret the results obtained in (a) & (b) above.

From the transactions below, what's the total in the Purchases Journal?

20X8 

June 1 Purchase goods from M. Nome on credit $16,000; P Royal $300; J Fry $180. 

June 3 Purchased stationery on credit $600

June 10 Goods returned by us to J Fry $20

June 15 Purchase equipment credit to N. Wonder $640. 

June 28 Purchase goods paying by cheque $80

Explain the meaning of cost of capital and its relevance in a net present value (NPV) analysis.

Nesto hypermarket sells three brands (A, B, and C) of laptop computers. The monthly sales of the three brands are: Brand A = 15 units; Brand B = 9 units and Brand C = 12 units. The unit price of brand A is R.O. 300; brand B is R.O. 280 and brand C is R.O. 200. The cost to the Stores is 280 R.O. for brand A; 260 R.O. for brand B, and 180 R.O for brand C. Let

Q = ; P =; and C =

Using the above matrices, calculate the following:

(a). Calculate total revenue 

(b). Calculate total cost 

(c). Calculate the monthly profit.

You have been appointed as an economic advisor to Wheels SA, an organisation that oversees the motor vehicle industry in South Africa. Over the past year, the following simultaneous changes have occurred in the South African motor vehicle market:

• A recently published survey indicates that consumers expect the price of motor vehicles to increase in the future;

• The cost of manufacturing motor vehicles has increased due to an increase in labour costs as well as the costs of other inputs.

Explain, with the use of a graph, the impact of the above changes on the equilibrium price and equilibrium quantity in the motor vehicle market

The company purchased furniture and fixtures to use in one of its stores for 440,000 in January of 20X5. The furniture and fixtures were being depreciated using the straight-line method over ten years with a residual value of 10,000. In December 20X9, Gameplay decided to close the location and entered into an exchange agreement with Allero Corporation. Allero agreed to give Gameplay vehicles with a fair value of 200,000 and cash of 50,000 in exchange for the furniture and fixtures from this store. The furniture and fixtures have an estimated fair value of 250,000 on the date of exchange. a. Make the depreciation entry for the furniture and fixtures that would be necessary in December 20X9, assuming that no entries have been made during the year. b. Determine the book value of the furniture and fixtures on the date of exchange. c. Record the journal entry Gameplay would make for this exchange. d. Where would Gameplay report the gain or loss you determined in part c. above?

Springfield Corporation purchases a new machine on March 3, 20X4 for $35,600 in cash. It pays an additional $3,400 to transport and set up the machine. Springfield’s accountant determines that the equipment has no residual value and that the useful life is five years. It is expected to generate 2,400,000 units during its life. Assume Springfield employs the half-year convention. 

a. Record the purchase of the machine.

b. Assume that Springfield uses the straight-line method of depreciation. Record depreciation expense for the first two years of the machine’s life. 

c. Assume that Springfield uses the double-declining balance method of depreciation. Record depreciation expense for the first two years of the machine’s life. 

d. Assume that Springfield uses the units-of-production method of depreciation. 

During Year 1, the machine produces 600,000 units. 

During Year 2, the machine produces 578,000 units. 

Record depreciation expense for the first two years of the machine’s life

The saving function of a random sample of ten families is given as where denote aggregate savings, denotes disposable income real interest rate. The sample data are given in the following table:-

20 25 25 30 35 40 43 42 50 55

100 110 115 120 140 145 145 140 150 160

2 2 3 2 3 4 3 4 5 5

Required:

a) Find the regression equation of the savings on disposable income and real interest rate

b) Estimate the savings when the disposable income is 180 and real interest rate is 6

c) Compute the coefficient of multiple determination and adjusted value

d) Test the significance of the individual regression coefficient at the 5% level of significance

e) Estimate the confidence limits of the individual regression coefficient at the 95% confidence level.

f) Test the overall significance of regression at 5% level.