During 20B, New Company Earned Service Revenues Amounting to $200,000

question 97

Multiple Choice

During 20B, New Company earned service revenues amounting to $200,000, of which $120,000 were collected in cash; the balance will be collected in January 20C. The 20B statement of earnings of the company should report which of the following amounts for service revenues?

• A) $120,000.
• B) $200,000.
• C) $320,000.
• D) $80,000.

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Definitions:

Dividend-Paying Firms

Companies that regularly distribute a portion of their profits to shareholders in the form of dividends.

Dividend Growth Model

A valuation model used to determine the value of a stock by using predicted dividends and discounting them back to present value.

Growth Rate

The rate at which a company's earnings, revenue, or other important metric increases over a specified period.

Dividend Growth Model

A model that estimates the value of a dividend-paying stock, based on the assumption that its dividends will continue to grow at a constant rate in the foreseeable future.