Total spa services earned $ 135 comma 000 of service revenue during 2018. of the $ 135 comma 000 earned, the business received $ 111 comma 000 in cash. the remaining amount, $ 24 comma 000, was still owed by customers as of december 31. in addition, total spa services incurred $ 80 comma 000 of expenses during the year. as of december 31, $ 16 comma 000 of the expenses still needed to be paid. in addition, total spa services prepaid $ 7 comma 000 cash in december 2018 for expenses incurred during the next year. 1. determine the amount of service revenue and expenses for 2018 using a cash basis accounting system. 2. determine the amount of service revenue and expenses for 2018 using an accrual basis accounting system.

Suppose that jim plans to borrow money for an education at texas a& m university. jim will need to borrow $25,000 at the end of each year for the next five years (total=$125,000). jim wishes his parents could pay for his education but they can’t. at least, he qualifies for government loans with a reduced interest rate while he is in school. he has a special arrangement with aggiebank to lend him the money at a subsidized rate of 1% over five years without having to make a payment until the end of the fifth year. however, at the end of the fifth year, jim agrees to pay off the loan by borrowing from longhorn bank. longhorn bank will lend him the money he needs at an annual interest rate of 6%. jim agrees to pay back the longhorn bank with 20 annual payments and the payments will be uniform (equal annual payments including principal and interest). (i) calculate how much money jim has to borrow at the end of 5 years to pay off the loan with aggiebank. a. $121,336 b. $127,525 c. $125,000 d. $102,020 e. none of the above