Annie's Attic Has the Following Account Balances for the Dates

question 51

Essay

Annie's Attic has the following account balances for the dates given:
$$\begin{array} { | l | r | r | } \hline & \text { September 1 } & \text { September 30 } \\\hline \text { Cash } & \$ 40,000 & 60,000 \\\hline \text { Accounts Receivable } & 40,000 & 38,000 \\\hline \text { Accounts Payable } & 6,000 & ? \\\hline\end{array}$$
Its net income for September 1 through September 31 was $20,000 and there were no investments by the owners or dividends paid. Determine the equity at both September 1 and September 30.

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Definitions:

Certain Income

refers to money or revenue that is guaranteed or highly likely to be received, with minimal risk of variation or loss.

Fair Insurance Policy

Describes an insurance contract that provide coverage at reasonable, transparent, and equitable terms for both parties.

Uncertainty

The state of having limited knowledge about present or future events, making outcomes unpredictable.

Expected Value

The anticipated value of a variable, calculated as a weighted average of all possible values, with weights being their probabilities of occurrence.