Brendan's Alarm Company Sells Subscriptions to Its Monitoring Service at a Fee

question 4

Essay

Brendan's Alarm Company sells subscriptions to its monitoring service at a fee of $75 per month. Clients pay bimonthly, every two months. As of January 1, Brendan currently has 50 clients paying on an even month rotation (February, April, etc.) and 30 clients paying on an odd month rotation (January, March, etc.). Brendan incurs expenses each month for $100 in electric bills and pays the bill every other month. The next payment for utilities is due in February. Determine Brendan's Alarm Company's net income for each month for the first quarter of the year, as well as the quarterly total, under both the cash and accrual bases. Is the quarterly total the same? If it is different, what would account for this?

---

Definitions:

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Observed Findings

Refers to results or outcomes that have been noticed and recorded from scientific experiments or observational studies.

Inferential Statistics

Statistical methods that allow researchers to make conclusions about populations based on samples.

Mathematical Statistics

The application of mathematics to the collection, analysis, interpretation, and presentation of numerical data.