The new yield to maturity on the bond is 5.16%.
Given Information
Current price of the bond = $980
FV = $1000
Coupon rate = 8%
Term = 10 maturity
After 1 year bond price = $1,200
Remaining life = 9 years (10-1)
New yield rate = [Coupon rate + (Maturity value - Current price) / Useful life] / [0.6*Current price + 0.4*Maturity value]
New yield rate = [1,000*8% + (1,000-1,200) / 9] / [0.6*1,200 + 0.4*1,000]
New yield rate = $57.78 / $1,120
New yield rate = 0.0515893
New yield rate = 5.16%
Therefore, the new yield to maturity on the bond is 5.16%.
Missing word "(Assume a face value of $1,000 and annual coupon payments."
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Suppose the United States and Japan have the following production possibility tables:
Japan United States
Bolts of Cloth Tons of Wheat Bolts of Cloth Tons of Wheat
1,000 0 500 0
800 100 400 200
600 200 300 400
400 300 200 600
200 400 100 800
0 500 0 1,000
a. Draw each country’s production possibility curve.
b. In whatgooddoesthe United States have a comparative advantage?
c. Is there a possible trade that benefits both countries?
d. Draw their combinedproduction possibility curve. L04
Answer:
a) attached below
b) Wheat production
c) Yes there is a possible trade that benefits both countries
d) attached below
Explanation:
Opportunity cost can be expressed as
= Value/cost of alternative / value/cost of chosen alternative
a) Draw each country's production possibility curve
attached below
b) United state have a comparative advantage in Wheat production because of lower opportunity cost
c) The possible trade that would benefit both countries is when both countries trade on goods that they have lower comparative opportunity cost
i.e. Japan producing just Bolt cloths while United states produce Wheat alone
d) combined production possibility curve
attached below
When the economy is in short-run equilibrium, Group of answer choices there are increases in inventory. people want to buy more than will be produced. there are decreases in inventory. total expenditures equal total production.
Answer:
total expenditures equal total production.
Explanation:
In the case when the economy is in the short-run equilibrium that means the total expenditures should be equivalent to the total production. In other words, we can say that the expenditure that can be incurred should be equal to the production
Hence, the last option is correct
35. The three all-encompassing internal resource categories used in the resource-based view are physical resources, human resources, and ___________________
Answer:
Organizational resources.
Explanation:
A resource-based view can be defined as a managerial framework or model that is typically used by an organization to examine and determine the fundamental resources that it can use or exploit in order to achieve competitive advantage that is sustainable over a period of time.
The three (3) all-encompassing internal resource categories used by many businesses in the resource-based view are physical resources, human resources, and organizational resources.
Competitive advantage can be defined as conditions, factors or circumstances that allow a business firm (organization) to manufacture finished goods or services better and perhaps cheaper than other (rival) firms in the same industry. Thus, it's responsible for putting a business firm in a superior or more favorable position than rival firms.
This ultimately implies that, a competitive advantage has a significant impact on a business because it increases its level of sales, revenue generation and profit margin when compared to rival firms in the same industry.
Wolfe Company had the following beginning inventory and purchases during 2018 Date Transaction Number of units Unit Cost 1/1 Beginning inventory 2,000 $22.00 4/12 Purchase No. 1 2,300 $26.00 7/11 Purchase No. 2 800 $28.00 10/5 Purchase No. 3 1,250 $30.00 Wolfe sold 4,100 units Determine the amount of ending inventory and cost of goods sold using the following methods: Method Ending inventory Cost of Goods Sold LIFO FIFO Weighted average
Answer:
Wolfe Company
The amount of:
LIFO FIFO Weighted Average
Ending inventory $50,500 $65,100 $58,005
Cost of goods sold $113,200 $98,600 $105,698
Explanation:
a) Data and Calculations:
Date Transaction Number of units Unit Cost Cost Value
1/1 Beginning inventory 2,000 $22.00 $44,000
4/12 Purchase No. 1 2,300 $26.00 59,800
7/11 Purchase No. 2 800 $28.00 22,400
10/5 Purchase No. 3 1,250 $30.00 37,500
Total inventory available 6,350 $163,700
Wolfe sold 4,100
Ending Inventory 2,250
LIFO
Ending Inventory = $50,500 (250 * $26 + 2,000 * $22)
Cost of goods sold:
4/12 Purchase No. 1 2,050 $26.00 53,300
7/11 Purchase No. 2 800 $28.00 22,400
10/5 Purchase No. 3 1,250 $30.00 37,500
Total cost of goods sold = 4,100 $113,200
FIFO:
Ending Inventory = Cost of goods available for sale - Cost of goods sold
= $65,100 ($163,700 - $98,600)
Cost of goods sold:
1/1 Beginning inventory 2,000 $22.00 $44,000
4/12 Purchase No. 1 2,100 $26.00 54,600
Total cost of goods sold = $98,600
Weighted average:
Weighted average cost = $25.78 ($163,700/6,350)
Ending inventory = $58,005 (2,250 * $25.78)
Cost of goods sold = $105,698 (4,100 * $25.78)
Which one of the following was not a contributing cause of the decline in investment and thus the recessionary expenditure gap occurring during the US recession of 2001?
A. Pessimism relating to the stock market crash
B. The collapse of numerous Internet-related start-up firms
C. Low-interest rates
D. Overcapacity in major industries
Answer:
Hence the correct option is Option C. Low interest rates.
Explanation:
Low interest rates:-
Because the real GDP is lower than the potential GDP at the full employment level (Overcapacity). Internet based start ups and stock market are collapsing (The dot com bubble).
Your firm has net income of $259 on total sales of $1,100. Costs are $620 and depreciation is $110. The tax rate is 30 percent. The firm does not have interest expenses. What is the operating cash flow
Answer:
The correct approach is "369".
Explanation:
The given values are:
Net income (NI),
= $259
Total sales,
= $1,100
Depreciation (Dep),
= $110
Tax rate,
= 30%
Now,
The operation cash flow will be:
= [tex]Net \ income +Depreciation[/tex]
By putting the values, we get
= [tex]259+110[/tex]
= [tex]369[/tex]
In a continuous review inventory system, the lead time for door knobs is weeks. The standard deviation of demand during the lead time is units. The desired cycle-service level is percent. The supplier of door knobs streamlined its operations and now quotes a 1 week lead time. Refer to the standard normal tableLOADING... for z-values. How much can the safety stock be reduced without reducing the percent cycle-service level? The safety stock can be reduced by nothing door knobs. (Enter your response rounded to the nearest whole number.)
Answer:
The answer is "116 doorknobs".
Explanation:
The standard deviation of the demand before the (four weeks) protection intervals = [tex]\sigma-d \times (\sqrt{L}) = 100 \ units\\[/tex]
The desired cycle service level is [tex]99\%[/tex].Therefore, [tex]z = 2.33[/tex]
The safety stocks for the four-weeks protecting interval are:
Safety stock [tex]= z\times [ \sigma-d \times (\sqrt{L})][/tex]
[tex]= 2.33 \times 100 \\\\= 233\ door\ knobs[/tex]
The safety stocks require for the one-week protection interval are: [tex]\sigma-dLT = \sigma-dt \times (\sqrt{L}) = \sigma-dt \times (\sqrt{4}) = 100\ door\ knobs\\\\\sigma-d = \frac{100}{(\sqrt{4})} = \frac{100}{2} = 50 \ door\ knobs\\\\[/tex]
Safety stock [tex]= z\times \sigma-dt = 2.33 \times 50 = 116.5 \ or\ 117 \ door\ knobs\\\\[/tex]
Safety stock reduction[tex]= 233 -117 = 116 \ door\ knobs[/tex]
An export subsidy will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.
Answer:
increase; decrease; decrease; decrease.
Explanation:
Trade can be defined as a process which typically involves the buying and selling of goods and services between a producer and the customers (consumers) at a specific period of time.
Basically, trade can be categorized into two (2) main groups and these are;
I. Import: this involves bringing in goods from a foreign country to sell in a different (domestic) country.
II. Export: it involves the sales of goods produced in a domestic country to a foreign country.
An export subsidy can be defined as any government policy that encourages the export of goods to other countries while discouraging the sales of goods in the domestic market through the use of tax reliefs, low cost loans, government foreign adverts, etc.
A surplus is the amount by which the quantity supplied of a good exceeds the quantity demanded of the good.
Producer surplus is the amount a buyer is willing to pay for a good minus the cost of producing the good.
Consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.
Hence, an export subsidy will increase producer surplus, decrease consumer surplus, decrease government revenue, and decrease overall domestic national welfare.
Quickbrush Paint Company is developing a linear program to determine the optimal quantities of ingredient A and ingredient B to blend together to make oil-base and water-base paint. The oil-base paint contains 90 percent A and 10 percent B, whereas the water-base paint contains 30 percent A and 70 percent B. Quickbrush currently has 10,000 gallons of ingredient A and 5,000 gallons of ingredient B in inventory and cannot obtain more at this time. Assuming that x represents the number of gallons of oil-base paint, and y represents the gallons of water-base paint, which constraint is correctly represents the constraint on ingredient A?
A. .9x + .3y ≤ 10,000
B. .9A + .1B ≤ 10,000
C. .9x + .1y ≤ 10,000
D. .3x + .7y ≤ 10,000
Answer:
A. 0.9x + 0.3y ≤ 10,000
Explanation:
Given
[tex]x \to[/tex] oil based plant
[tex]y \to[/tex] water based plant
The data can be represented in tabular form as:
[tex]\begin{array}{ccc}{} & {A} & {B} & {x} & {90\%} & {10\%} & {y} & {30\%} & {70\%} & {} & {10000} & {5000}\ \end{array}[/tex]
Considering only A, we have the following constraints:
[tex]A \to 90\% * x + 30\% * y[/tex]
[tex]A \to 0.9x + 0.3y[/tex]
Since the company currently has 10000 of A.
The above constraint implies that, the mixture cannot exceed 10000.
So, we have:
[tex]A \to 0.9x + 0.3y \le 10000[/tex]
Hence, (A) is correct
Olsen Company uses a standard cost system for its production process. Olsen Company applies overhead based on direct labor hours. The following information is available for July: Standard: Direct labor hours per unit 2.20 Variable overhead per hour $2.50 Fixed overhead per hour (based on 11,990 DLHs) $3.00 Actual: Units produced 4,400 Direct labor hours 8,800 Variable overhead $29,950 Fixed overhead $42,300 Refer to Olsen Company Using the three-variance approach, what is the efficiency variance
Answer:
1800
Explanation:
During January, Dream House Builders, Inc. incurred $550 of actual indirect materials costs, as supported by materials requisitions.
Required:
Draw the journal entry.
Answer and Explanation:
The journal entry is given below:
Factory overhead Dr $550
To Raw material inventory $550
(being the actual indirect material cost is recorded)
Here the factory overhead is debited as it increased the expense while the raw material inventory is credited as it decreased the assets
Saunders and Flimsy Partnership paid dividends of $0.27 and $0.15 per share last year. If yesterday's closing price was $12.27, what is the current yield on the stock
Answer:
the current yield on the stock is 3.42%
Explanation:
the computation of the current yield on the stock is shown below:
Current yield = Annual dividends paid ÷ Current market closing price
= ($0.27 + $0.15) ÷ $12.27
= $0.42 ÷ $12.27
= 3.42%
hence, the current yield on the stock is 3.42%
we simply applied the above formula to determine the current yield on the stock
Which of the following characteristics relate to "dollarize"? a. When a country that is not the United States uses the U.S. dollar as its currency. b. The market in which people buy one currency while using another currency. c. When a currency is worth less in terms of other currencies. d. An investment in another country that is purely financial and doesn’t involve any management responsibility.
Answer:
When a country that is not the United States uses the U.S. dollar as its currency.
Explanation:
A country is said to "dollarize" when such a country allows the use of the dollar alongside or instead of its currency.
A country may dollarize in order to increase ease of doing businesses or as a means of facilitating tourism and boosting the country's tourism potential.
Dollarization may be official and have the approval of the leadership of a country. This occurs when a country ceases to use her domestic currency and begins to use only foreign currency.
Which of the following statements about striving to reduce labor costs per pair produced at each of the company's plants is true?
a. A company cannot achieve labor costs per pair produced that are close to the lowest in the industry (in those geographic regions where it has plants) unless its annual total compensation of plant workers is below the average annual total compensation paid by all companies with plants in these same regions.
b. All companies, regardless of the strategy being employed, should pursue actions to manage employee compensation and labor productivity in a manner that results in labor costs per pair produced that are equal to (or very close to) the industry-low in each region where the company has plants.
c. It is very difficult for a company producing branded footwear with a high S/Q rating to achieve labor costs per pair produced that are below the industry average in each geographic region where the company has plants.
d. A company pursuing a low-cost provider strategy is better able to pursue actions aimed at achieving low labor costs per pair produced in each of its plants (as compared to the labor costs of companies with plants in the same regions) than is a company pursuing a differentiation strategy.
e. It is more cost effective for a company to compensate plant workers at levels that are close to the highest in the industry in each geographic region where it has plants than it is for a company to pursue actions to keep labor costs per pair produced below the industry average in each geographic region where it has plants.
Answer:
b. All companies, regardless of the strategy being employed, should pursue actions to manage employee compensation and labor productivity in a manner that results in labor costs per pair produced that are equal to (or very close to) the industry-low in each region where the company has plants.
Explanation:
The less labor cost of production per pair could be attained in following two ways
1. The productivity level is icnreased
2. The compensation should be managed and it provides the combination of both fixed and variable. Also it pays the high compensation but at the more productivity rate due to which the labor cost per pair would fall
So as per the given situation, the option b is correct
Suppose that there is no third-party payer in the medical care market in Uganda in 1955. Suppose that in 1960, health insurance companies begin operations in Uganda. All else being equal, what does supply and demand analysis predict will happen in the medical care market in 1960
Answer: b. Total expenditures will increase
Explanation:
Medical insurance reduces the amount that people have to pay to get health related services. Ugandans from the year 1960 can be expected to pay less for medical services as a result.
If people are able to pay less for a good or service, the normal thing that they would do would be to demand more of that good and service because it is more affordable. Total expenditure in the medical field will increase as a result.
In (Noon) Company, direct materials are added at the beginning of the production process. Conversion costs are incurred evenly throughout the production process. Before inspection, some units are spoiled due to undetectable materials defects. Inspection occurs when units are 60% converted. Spoiled units generally constitute 6% of the good units. Data for December 2019 are as follows: WIP, beginning inventory 12/1/2019 Direct materials 22,500 units (100% complete) Conversion costs (55% complete) Started during December 76,700 units Completed and transferred out 12/31/2019 72,500 units WIP, ending inventory 12/31/2019 18,400 units Direct materials (100% complete) Conversion costs (65% complete) What is the number of normal spoilage units?
Answer:
Following are the responses to the given question:
Explanation:
Statement In December the computation of typical spoiling units shall be shown:
Particulars Units
WIP Inventory Start on 12 January 2019 22,500
Departments began in December 76,700
Total stock available for both the month 99,200
Less: transferred units on 31 December 2019 72,500
Inventory of Less: WIP on 31 December 2019 18,400
Inventory of Balance (Normal Spoilage units) 8,300
Sunland Company is about to issue $262,700 of 6-year bonds paying an 9% interest rate, with interest payable semiannually. The discount rate for such securities is 8%.
Required:
In this case, how much can Sunland expect to receive from the sale of these bonds?
Answer:
Amount from sale of bonds $275,028
Explanation:
The computation is shown below;
Particulars Amount PV factor Present value of cash flows
Interest $11,821.50 9.38507 $1,10,946
($262,700 × 0.09 × 6 ÷ 12)
Principal $262,700 0.6246 $164,082
Amount from sale of bonds $275,028
Recommend specific tools and detailed strategies to help Booktix meet their goals & suggest which platform would be the best for them.
Answer: Hello your question has some missing details
Their goals are as follows:
• Create brand and product awareness
• Engage with users
• Increase website traffic and conversions
answer :
Tools : Qwaya , Ads A/B Testing , AD roll
" A social media platform " can be used to achieve these goals
Explanation:
Booktix goals been
to Create brand and product awareness , Engage with users and Increase website traffic and conversions
some of The best tools that they can use are:
Qwaya : This is an all in one software that can help Brook tix achieve all their goals in one place
Ads A/B Testing; this tool is used to test for the results of adverts been run. the main purpose of this tool is to help you know where to channel your resource for future adverts .
AD roll ; A tool used for the purpose of retargeting potential and existing clients
The platform I would recommend for Booktix is " A social media platform "
A Type I subsequent event refers to _______. an event that occurred after the date of the financial statements an event that is typified by debit entries to contra-revenue accounts a contingent event, that may or may not occur an event that most likely occurred before the date of the financial statements
Answer:
that most likely occurred before the date of the financial statements
Explanation:
Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP) and financial accounting standards board (FASB).
Basically, financial statements are formally written records of the business and financial activities of a business entity or organization. The four (4) main types of financial statements are; cash-flow statement, balance sheet, statement of changes in equity and income statement.
Furthermore, there are two (2) main methods used in financial accounting for analyzing financial statements and these are;
I. Vertical analysis.
II. Horizontal analysis.
A Type I subsequent event refers to an event that most likely occurred before the date of the financial statements. Thus, it must have been reported or posted before the date of publishing a financial statement.
On the other hand, any event that is most likely to occur after the date a financial statement is issued, is referred to as a Type II subsequent.
Green Corporation's assets are valued at $1,278,000 after payment of all corporate debts, except for $191,700 of taxes payable on net gains it recognized on the liquidation. Bruno, an individual and the sole shareholder of Green, has a basis of $67,095 in his stock.
Required:
Compute the gain or loss recognized by Bruno on the liquidation of Green Corporation.
Answer:
$1,019,205 gain
Explanation:
Computation of gain or loss recognized by Bruno on the liquidation of Green Corporation:
Amount ($)
Market value of assets $1,278,000
Less: Tax liability ($191,700)
Amount realized $1,086,300
($1,278,000-$191,700)
Less: Stock Basis ($67,095)
Gain Recognized $1,019,205
($1,086,300-$67,095)
Therefore, gain of $1,019,205 is recognized by Bruno on the liquidation of Green Corporation.
The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.
A. True
B. False
Answer:
A. True
Explanation:
A financial statement is a written report that quantitatively describes a firm's financial health. Under the financial statements is a cash-flow statement, which is used to record the cash inflow and cash equivalents leaving a business firm.
Cash flow statement, also known as the statement of cash flows, contains financial information about operating, financial and investing activities.
Basically, financial statements are formally written records of the business and financial activities of a business entity or organization.
There are four (4) main types of financial statements and these are;
1. Cash flow statement: it contains financial information about operating, financial and investing activities.
2. Statement of changes in equity: it contains financial information about profits or loss, dividends, etc.
3. Income statement: it contains financial information about the income and expenses of an organization.
An income statement comprises of the financial information about the income and expenses of an organization over a specific period of time.
4. Balance sheet: it contains financial information about assets, liability, and equity.
Furthermore, the amount of a cash dividend liability is expected to be recorded on the particular date of record because it is this date that identify the persons or entities who receives the dividend.
There are several attempts to explain Marvels Success via competetive strategy but they fall flat: competitve strategy, with this specific case neither predicts nor explains the outcome why?
Answer:
It has been a well known fact that competitive strategy creates a unique value for a target set of movie customers. However, it is not able to predict nor explain the outcome due to the fact that Marvel only focused on trying to compete to be the best in comic and superhero films which thus resulted in basically a case whereby there was a competition in which one participant wins totally and another loses without gaining any objectives and thus they were not able to win.
Explanation:
This question is taken from a book titled "The Marvel Way: Restoring a Blue Ocean". It was written by W. Chan Kim, Renee Mauborgne, Michael Olenick. The central theme of the book was about one of the greatest turnarounds in modern business history by the then Marvel CEO with the name Peter Cuneo who was responsible for turning the business around and succeeded in launching a blue ocean.
From the question, neither predicts nor explains the outcome because;
It has been a well known fact that competitive strategy creates a unique value for a target set of movie customers. However, it is not able to predict nor explain the outcome due to the fact that Marvel only focused on trying to compete to be the best in comic and superhero films which thus resulted in basically a case whereby there was a competition in which one participant wins totally and another loses without gaining any objectives and thus they were not able to win.
________ is the process of coordinating all messages, media and activities used by an organization to communicate with the market across different communication methods
Answer:
integrated Marketing communication
Explanation:
This method is used by firms and companies to brand their communications and also in their coordination. It makes sure that all the various forms of communications are well linked together. This would create a unified communication channel for the consumer during their interactions with the enterprise. the aspects it integrates includes, advertising, public relations, social media and promotion of sales.
Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 59,000 units of each product. Sales and costs for each product follow. Product T Product O Sales $ 997,100 $ 997,100 Variable costs 697,970 99,710 Contribution margin 299,130 897,390 Fixed costs 150,130 748,390 Income before taxes 149,000 149,000 Income taxes (30% rate) 44,700 44,700 Net income $ 104,300 $ 104,300 Required: 1. Compute the break-even point in dollar sales for each product
Answer:
Explanation:
Product T
Contribution Margin Ratio=Contribution Margin / Sales
Contribution margin ratio= 299,130.00/ 997,100
Contribution margin ratio=30.00%
Break-Even Dollars=
Fixed costs/Contribution margin ratio Break-even dollars=$150,130/30%
Break-even dollars=$500,433
Product O
Contribution Margin Ratio=Contribution Margin / Sales
Contribution margin ratio= 897,390/ 997,100
Contribution margin ratio= 90.00%
Break-Even Dollars=Fixed costs/ Contribution margin ratio
Break-Even Dollars=$748,390/90% Break-Even Dollars=831,544
The nominal interest rate is 6%. Expected inflation is 2%. Actual inflation is 1%. Calculate the ex-ante and ex-post real interest rates. Who benefits from lower actual inflation
Answer:
1. Ex-ante real interest rate is:
= 4%
2. Ex-post real interest rate is:
= 5%
3. The LENDER benefits from lower actual inflation. By this, the Ex-ante real interest rate is lower than the Ex-post real interest rate at which the borrower will repay the loan.
Explanation:
a) Data and Calculations:
Nominal interest = 6%
Expected inflation = 2%
Actual inflation = 1%
Ex-ante real interest rate = 4% (6% - 2%)
Ex-post real interest rate = 5% (6% - 1%)
b) The implication is that inflation is lower than expected, and this benefits the lender at the expense of the borrower. The opposite is applicable when the inflation is higher than expected, and the result benefits the borrower at the expense of the lender.
Novak Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January 1, 2020, Novak entered into a 3-year service contract with Walleye Tech. Walleye promises to pay $10,900 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $8,700. In addition, Walleye agrees to pay an additional $21,800 at the beginning of the third year to cover the contract for 3 additional years (i.e., 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract.
Required:
a. Prepare the journal entries for Tyler in 2019 and 2020 related to this service contract.
b. Prepare the journal entries for Tyler in 2020 related to the modified service contract, assuming a prospective approach.
c. Repeat the requirements for part (b), assuming Tyler and Walleye agree on a revised set of services (fewer bookkeeping services but more tax services) in the extended contract period and the modification results in a separate performance obligation
Answer: See explanation
Explanation:
a. 1 jan 2020
Debit Cash $10,900
Credit Unearned revenue $10,900
31st dec 2020
Debit Unearned revenue $10,900
Credit Service revenue $10,900
1 jan 2020
Debit Cash $10,900
Credit Unearned revenue $10,900
31st dec 2020
Debit Unearned revenue $10,900
Credit Service revenue $10,900
b. 1 Jan 2021
Debit Cash $30500
Credit Unearned revenue $30500
31st dec 2020
Debit Unearned revenue $7,625
Credit Service revenue $7,625 ($30500/4)
c. 1 Jan 2020
Debit Cash $30500
Credit Unearned revenue $30500
31st Dec 2020
Debit Unearned revenue $8,700
Credit Service revenue $8,700
Scenario 34-1. Take the following information as given for a small, imaginary economy: When income is $10,000, consumption spending is $6,500. When income is $11,000, consumption spending is $7,250. Refer to Scenario 34-1. The marginal propensity to consume (MPC) for this economy is
Answer:
0.75
Explanation:
Marginal Propensity to Consume (MPC) is the change in consumption due to change in income
Change in consumption = $7,250 - $6,500 = $750
Change in income = $11,000 - $10,000 = $1,000
MPC = Change in consumption / Change in income
MPC = 750 / 100
MPC = 0.75
when goods are sold to a customer by entity and customer promise to pay amount at certain future time period that is know as
Answer:
Promissory agreement.
Explanation:
A promissory agreement can be defined as an evidence of a debt and as such involves the use of a legal financial tool such as a promissory note as a written promise to declare that a party (borrower) would pay another (lender) at a specific period of time.
Thus, when goods are sold to a customer by a business entity and the customer promises to pay an amount of money at a certain future time period it is known as a promissory agreement.
A promissory note can be defined as a signed document that contains a written promise by a customer to pay a specific amount of money to an individual or business firm, on demand or at a certain future time period, for the goods or services purchased.
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information:
Sales revenue $470,000
Cost of goods sold $410,000
Operating expenses $70,000
Long-term capital gains $2,400
§1231 gains $900
Charitable contributions $300
Municipal bond interest $300
Salary paid as a guaranteed payment to Deanne (not included in expenses) $3,000
a. Compute the adjusted basis of each partner’s interest in the partnership immediately after the formation of the partnership.
b. List the separate items of partnership income, gains, losses, and deductions that the partners must show on their individual income tax returns that include the results of the partnership’s first year of operations.
c. (Optional) Using the information generated in answering parts a. and b., prepare Blue Bells’ page 1 and Schedule K to be included with its Form 1065 for its first year of operations along with Schedule K-1 for Deanne.
d. What are the partners’ adjusted bases in their partnership interests at the end of the first year of operations?
Answer:
As attached.
Explanation:
Statement Of Owner's Equity Jay Pembroke started a business in April. Prepare a Statement of Owner's Equity using the following balances for April transactions. Cash $12,834 Accounts Receivable 1,809 Office Supplies 4,667 Prepaid Insurance 1,327 Accounts Payable 327 Jay Pembroke, Capital 18,155 Jay Pembroke, Drawing 145 Service Fees 3,113 Rent Expense 813 You will need to calculate the net income for April.
Answer and Explanation:
the computation of the net income for the april month is as follows;
= Service fees - rent expense
= $3,113 - $813
= $2,300
Now the preparation of the owner equity is as follows;
Jay Pembroke, Capital $18,155
Net income $2,300
Less; Jay Pembroke, Drawing $145
Jay Pembroke, Capital ending capital $20,310
We assume that the capital is given for the beginning of the month
