Answer: a. 120 days
b. $185400
Explanation:
a. The due date of the note will be:
August = 31-10 = 21 days
September = 30 days
October = 31 days
November = 30 days
December = 8 days
Total = 120 days
b. The maturity value of the note will be:
= 180000 + (180000 × 9% * 120/360)
= 180000 + (180000 × 0.09 × 0.33)
= 180000 + 5346
= 185346
= 185400 to nearest dollar
3. 8 december
Debit Cash $ 185,400
Credit Note Receivable $180,000
Credit Interest Revenue $5,400
(10 points) The Wall Street journal recently reported that the Chinese central bank has decided to increase its reserve holdings of U.S. government bonds. What effect might this policy change have on the U.S. bond markets, currency valuations, and the U.S. Balance of Payments
Answer:
China is that the largest creditor to the USA with over 1 trillion dollars. China has decided to scale back holding folk's bonds to retaliate against actions of the US govt.
Such action by the Chinese government will increase the value of borrowing for the United States government and therefore the value of bonds is probably going to fall.
While China is going to be getting an exchange by selling its bond holdings. The currency of china will appreciate while the US dollar will depreciate thanks to the outflow of currency.
A _____________ strategy entails an organization developing a product and/or service that offers unique attributes that are valued by customers and that the customer perceives to be distinct from competitor offerings.
Answer: differentiation strategy
Explanation:
The differentiation strategy refers to the marketing strategy that is designed in order to distinguish the product and services of a company from other companies.
Product differentiation helps in the development of a strong value proposition which ensures that the product is attractive to the audience. The differentiation strategy ensures that the product is unique from others and this creates a competitive advantage.
Bramble Corp. is planning to sell 1200 boxes of ceramic tile, with production estimated at 1170 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.50 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $10 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Bramble has 3200 pounds of clay mix in beginning inventory and wants to have 4100 pounds in ending inventory. What is the total amount to be budgeted for manufacturing overhead for the month
Answer: $6,435
Explanation:
Manufacturing overhead is applied at a rate of 110% of direct labor costs.
Direct labor costs:
= Budgeted number of boxes to be produced* number of direct labor hours required * employee salary per hour
= 1,170 * 0.50 * 10
= $5,850
Manufacturing overhead is 110% of this:
= 5,850 * 110/100
= $6,435
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Standard Quantity or Hours 6.80 pounds 0.50 hours Standard Price or Rate $ 3.00 per pound $11.00 per hour Direct materials Direct labor $20.40 $ 5.50 During the most recent month, the following activity was recorded:
a. 22,900.00 pounds of material were purchased at a cost of $2.70 per pound.
b. All of the material purchased was used to produce 3,000 units of Zoom.
c. 1,400 hours of direct labor time were recorded at a total labor cost of $18,200.
Required:
1. Compute the materials price and quantity variances for the month.
2. Compute the labor rate and efficiency variances for the month.
(For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to the nearest whole dollar.)
1. Materials price variance
Materials quantity variance
2. Labor rate variance
Labor efficiency variance
Answer:
Huron Company
1. Materials price variance = $6,870 F
Materials quantity variance = $7,500 U
2. Labor rate variance = $($2,800) U
Labor efficiency variance = $1,100 F
Explanation:
a) Data and Calculations:
Standard Quantity 6.80 pounds
Standard Price $ 3.00 per pound
Direct materials $20.40
Standard Rate $11.00 per hour
Standard hours 0.50 hours
Direct labor $ 5.50
a. Purchase of 22,900 pounds of materials at $2.70
b. Production units = 3,000
Actual quantity used 7.63 pounds (22,900/3,000)
Actual Price = $2.70
Actual material cost per unit = $20.61
c. Direct labor time = 1,400 hours at a total labor cost of $18,200
Actual rate per hour = $13 per hour ($18,200/1,400)
Actual hours = 0.47 hours
Actual direct labor cost per unit = $6.07
1. Materials price variance for the month = (Standard Price - Actual Price) * Actual Quantity of materials
= ($3 - $2.70) * 22,900
= $6,870 F
Quantity variance for the month = (Standard Qty - Actual Qty) * Standard Price
= (20,400 - 22,900) * $3
= -$7,500 U
2. Labor rate variance for the month = (Standard rate - Actual rate) * Actual labor hours
= ($11.00 - $13.00) * 1,400
= -$2,800 U
Direct labor Efficiency variance for the month = (Standard hours - Actual hours) * Standard Rate
= (1,500 - 1,400) * $11
= $1,100
The direct method of reporting operating cash flows: ________
a. Separately lists cash receipts and payments.
b. Must be used by all companies.
c. Is used by most companies.
d. Is considered supplementary disclosure.
e. Is not recommended by the FASB, but is commonly used.
Answer:
e. Is not recommended by the FASB, but is commonly used.
Explanation:
A statement of cash flows is also known as cash flow statement and it is a financial statement which is used to illustrate how changes in income and various account of the balance sheet affect cash and cash equivalents.
The statement of cash flows is also used by financial experts or accountants to breakdown the cash-flow analysis into;
1. Cash-flow from investing activities: it represents the cash flow from investment such as proceeds from the sale of plant, equipments etc.
2. Cash-flow from financing activities: it represents the cash flow from debt or equity. Typically, it's the costs used in a financing a business.
3. Cash-flow from operating activities: it represents cash-flow and transactions from operational business activities such as employee salary, sales of goods etc.
Generally, the statement of cash flows provides financial information about an organization's operating profitability and how it use its operating cash flow.
Financial accounting standards board (FASB) is a private, non-profit organization saddled with the responsibility of establishing and maintaining financial accounting and reporting standards for general guidance of individuals or capital providers such as investors, issuers and auditors.
In Financial accounting, the direct method of reporting operating cash flows uses actual cash inflows and outflows from the operating activities of a company by generating data from the income statement (cash receipts and cash disbursements/payments).
However, the direct method of reporting operating cash flows is not recommended by the FASB, but it's commonly used.
This ultimately implies that, it's a recommended accounting method, but it's not an accounting standard required by the financial accounting standards board (FASB).
Pettygrove Company had 800,000 shares of $10 par value common stock outstanding. The amount of additional paid-in capital is $4,000,000, and Retained Earnings is $1,200,000. The company issues a 2-for-1 stock split. The market price of the stock is $14. What is the balance in the Common Stock account after this issuance
Answer:
$8,000,000
Explanation:
Balance in the Common Stock account = Number of hare after split * Par value of share
Balance in the Common Stock account = 800,000 * 2 * $10/2
Balance in the Common Stock account = $8,000,000
So, the balance in the Common Stock account after share split will be $8,000,000.
MC Qu. 150 Glaston Company manufactures... Glaston Company manufactures a single product using a JIT inventory system. The production budget indicates that the number of units expected to be produced are 184,000 in October, 192,500 in November, and 189,000 in December. Glaston assigns variable overhead at a rate of $0.80 per unit of production. Fixed overhead equals $141,000 per month. Compute the total budgeted overhead that would appear on the factory overhead budget for month of October.
Answer:
$288,200
Explanation:
Computation for the total budgeted overhead that would appear on the factory overhead budget for month of October.
Using this formula
Total budgeted overhead=(Units expected to be produced*Variable overhead rate)+Fixed overhead
Let plug in the formula
Total budgeted overhead=(184,000 * $0.80) + $141,000
Total budgeted overhead=$147,200+$141,000
Total budgeted overhead = $288,200
Therefore the total budgeted overhead that would appear on the factory overhead budget for month of October is $288,200
A company purchased $10,300 of merchandise on June 15 with terms of 2/10. n/45, and FOB shipping point. The freight charge, $650, was added to the .amount. On June 20, it returned $1,040 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:_________
a. $9,224.
b. $10,590
c. $10.950.
d. $10.690.
e. $9,725.
b should be that correct answer
Flying Cloud Co. has the following operating data for its manufacturing operations:
Unit selling price $ 350
Unit variable cost $ 100
Total fixed costs $980,000
The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 5%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be:__________
a) increased by 368 units
b) decreased by 368 units
c) increased by 132 units
d) decreased by 264 units
Answer:
a) increased by 368 units
Explanation:
The calculation of the next break even point should be
Existing break-even point for Flying Cloud Co. is
= Fixed Cost ÷ Contribution Margin Per Unit
= Fixed Cost ÷ Sales Price Per Unit - Variable Cost per Unit
= $980,000 ÷ ( $350 - $100)
= 3,920 Units
Now
Revised Variable cost = $100 × 110%
= $110
And,
Revised Fixed cost = $980,000 × 105%
= $1,029,000
So,
Revised break-even point for Flying Cloud Co. is
= Fixed Cost ÷ ( Contribution Margin Per Unit
= Fixed Cost ÷ ( Sales Price Per Unit - Variable Cost per Unit
= $1,029,000 ÷ ( ( $350 -$110)
= 4,287.5
= 4,288 units
So,
Increase = 4,288 Units - 3920 Units
= 368 Units Increase
The maximum price that can be asked for the new jPad model is $2,000 at which point they would sell 0 units. It costs Pear $600 to manufacturer and deliver these jPads to their stores. Determine the optimal price for this new jPad, which can be assumed to operate in a monopoly (at least upon introduction).
Answer: $700
Explanation:
Based on the information given in the question, the optimal price for this new jPad, which can be assumed to operate in a monopoly will be calculated thus:
P = 2000+Q
TR = P × Q
TR = (2000 + Q) × Q
TR = 2000Q + Q²
MR = 2000 + 2Q
MC = 600
Since marginal revenue equals to marginal cost, this will be:
MR = MC
2000+2Q = 600
2Q = 2000 - 600
2Q = 1400
Q = 1400/2
Q = 700
Senior managers are responsible for making specific plans to implement the strategy. The above statement is true or false. explained
Answer:
True
Explanation:
If you had to recommend one product, which product would you recommend they create? Underline or highlight your answer:
● Organic Bloom Shampoo.
● Moisturizing Black Soap Shampoo with Dandruff Control.
● Coconut Protein Shampoo and Conditioner.
Answer:
the second option
Explanation:
my dandruff is pretty bad
Moisturizing Black soap Shampoo with Black dandruffs Ultimate control is what I would seriously recommend. A lot of people are getting dandruffs and lices more nowadays, so the product would be very fitting for the demand.
Happy Lawn Company started a lawn services business on January 1, 20X1 (so all account balances were zero on January 1, 20X1). It sends invoices to its customers for lawn maintenance services at the end of each month, and expects the customer to pay within 30 days. All of these sales were made on credit. During 20X1, cash collected from its customers totaled $750,000 for services rendered during the year. At the end of 20X1, the Accounts Receivable for Happy Lawn had a balance of $60,000. After all write-offs but before the year-end adjusting entry, the Allowance for Doubtful Accounts had a debit balance of $4,000.
Assume that Happy Lawn uses the percentage of credit sales method (to directly calculate the bad debt expense) instead of the aging method, and it is estimated that it will not collect 1% of the total credit sales.
Required:
Under this assumption what is Happy Lawn's 20X1 Bad Debt Expense?
Answer:
$754,000
Explanation:
Calculation to determine Happy Lawn's 20X1 Bad Debt Expense?
Using this formula
Bad Debt Expense=Cash collected +
Allowance for Doubtful Accounts debit balance
Let plug in the formula
Bad Debt Expense=$750,000+$4,000
Bad Debt Expense=$754,000
Therefore Happy Lawn's 20X1 Bad Debt Expense is $744,000
Based on this given assumption, Happy Lawn's 20x1 Bad Debt Expense for the year is $12,140 ($8,140 + $4,000).
Data and Calculations:
Cash collected during 20X1 = $750,000
Accounts Receivable balance at year-end = $60,000
Doubtful Accounts after write-offs = $4,000
The total credit sales = $814,000 ($750,000 + $60,000 + $4,000)
Estimated uncollectible = 1% of total credit sales
Therefore, the uncollectible allowance (doubtful accounts) balance would be = $8,140 ($814,000 x 1%)
Thus, based on the assumption, Happy Lawn's 20x1 Bad Debt Expense is $12,140 ($8,140 + $4,000).
Learn more about using the percentage of credit sales method to calculate the bad debt expense here: https://brainly.com/question/14104071
Change Treaster in equilibrium Income Investment adultiplier =Y-S II 1-6 In au A the (ID Accure acanany Tax Increased by eas what will be the change in equilibrium Income if the slope of the saving function is 0.5 Initial equilibrium income was cu 1000 what will be the new squilibrium. & Incame after tax decrease Interprete your findings
Answer:
실례합니다? 당신은 이것을 의미합니까?
Explanation:
균형에서 Treaster의 변화 소득 투자 성체 = YS II 1-6 In au A (ID Accure acanany Tax 증가 eas만큼 균형의 변화는 얼마입니까 저축 함수의 기울기가 0.5인 경우 소득 초기 균형 소득은 cu 1000 새로운 균형이 되십시오. & 세금 감면 후 소득 조사 결과 해석 ??
Lila Harrison is the sole employee of ABC Grocers. Her gross pay for the week was $400. She had deductions of $50 for federal income tax, $24.80 for social security tax, and $5.80 for Medicare tax. The journal entry to record her gross pay would include:
Answer:
Debit to salary expense for $400.00
Explanation:
In the case when a company is preparing the profit and loss statement so they first have the gross salary
The net salary should be
= Gross salary - deductions - taxes
Now in order to record the gross pay we have to debit to the salary expense for $400 as it increased the expense and expense contains the normal debit balance
what is the purpose of the Statement of Understanding
Answer:
It ensures that when consumers sign the Medicare Advantage and/or Part D Enrollment Application, they are acknowledging their understanding that they are actually enrolling, in which plan they are enrolling, and standard disclosures.
Explanation:
Full service brokerage service includes: A. Origination, underwiritng, and sales B. Registration of securities, storage of securities, and execution of trades C. Execution of trades, investment advice, and margin credit D. Cash management service, private placements, and security distribution
Answer:
C. Execution of trades, investment advice, and margin credit
Explanation:
A full service brokerage firm provides different kind of services like trading, wealth management, etc. And, for giving these types of services it would charge to the clients on the commission basis. Also, it hels the clients via support them & facilitate them with respective to trading, buidling and managing the portfolios
Therefore, the option c is correct
The biggest advantage of business blogs is that they Group of answer choices are the primary method of internal business communications. provide anytime access to digital audio and video files containing corporate training, marketing, and informational messages. have the potential to reach a vast, far-flung audience. can safeguard against hackers and rival companies.
Answer:
have the potential to reach a vast, far-flung audience
Explanation:
A business blog (b-blog) is the blog that could be published and it can be either involved the communication of the company done internally or the same should be posted at the internet
So the advantage of writing the business blogs is that it could be reached to the general audience at the fastest way so that everyone could be familiar with the performance and other things about the company
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:
Office Expenses Total Allocation Basis
Salaries $30,000 Number of employees
Depreciation 20,500 Cost of goods sold
Advertising 41,500 Net sales
Item Drilling Grinding Total
Number of employees 1080 1620 2700
Net sales $326,625 $477,375 $804,000
Cost of goods sold $76,500 $127,500 $204,000
The amount of the total office expenses that should be allocated to Grinding for the current period is : ____________
Answer:
Total allocated costs= $63,221.7
Explanation:
First, we need to calculate the allocation rates based on the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Salaries= 30,000/2,700= $11.11 per number of employees
Depreciation= 20,500/204,000= $0.10 per cost of goods sold dollar
Advertising= 41,500/804,000= $0.052 per net sales dollar
Now, we can allocate costs to Grinding:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Salaries= 11.11*1,620= 17,998.2
Depreciation= 0.10*204,000= 20,400
Advertising= 0.052*477,375= 24,823.5
Total allocated costs= $63,221.7
Morgana Company identifies three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $140,000, $240,000, and $54,000, respectively. The cost driver for each activity and the estimated annual usage are number of setups 2,000, machine hours 24,000, and number of inspections 1,200.
Required:
Compute the overhead rate for each activity.
Answer:
Machine setups= $70 per setup
Machining= $10 per machine hour
Inspection= $45 per inspection
Explanation:
To calculate the allocation rate for each activity, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine setups= 140,000 / 2,000= $70 per setup
Machining= 240,000 / 24,000= $10 per machine hour
Inspection= 54,000 / 1,200= $45 per inspection
Corporation sold 210000 watches and produced 217000 watches that it sold for $19 each. The company determined that fixed manufacturing cost per unit was $8 per watch. The company reported a $1,302,000 gross margin on its financial statements. Determine the total contribution margin.
Answer:
The total contribution margin is:
= $2,982,000.
Explanation:
a) Data and Calculations:
Production units = 217,000 watches
Sales units = 210,000 watches
Sales price per watch = $19
Sales revenue = $3,990,000 (210,000 * $19)
Cost of goods sold 2,688,000 ($3,990,000 - $1,302,000) ($12.80 each)
Gross profit = $1,302,000
Cost of goods sold per unit = $12.80 ($2,688,000/210,000)
Fixed cost per unit = $8
Variable cost per unit = $4.80 ($12.80 - $8.00)
Contribution margin per unit = $14.20
Total contribution margin = $2,982,000 ($14.20 * 210,000)
Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVs sell for $4,000 each. Variable selling expenses are $230 per ATV. The remaining selling expenses are fixed. Administrative expenses are 70% variable and 30% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,880 each.
POLARIX
Income Statement—Consumer ATV Department
For Year Ended December 31, 2017
Sales $619,200
Cost of goods sold 311,320
Gross margin 307,880
Operating expenses
Selling expenses $160,000
Administrative expenses 42,500 202,500
Net income $105,380
Required:
1. Prepare an income statement for this current year using the contribution margin format.
2. For each ATV sold during this year, what is the contribution toward covering fixed expenses and earning income?
Using the expanded accounting equation, calculate and enter the answers for each question. You will need to use the answers you calculate for beginning and ending retained earnings to answer the rest of the questions.
Assets Liabilities
Beginning of Year: $29,000 $16,000
End of Year: $63,000 $29,000
Required:
a. What is the equity at the beginning of the year? 13000
b. What is the equity at the end of the year? 34000
c. If the company issues common stock of $5,500 and pay dividends of $36,700, how much is net income (loss)?
Answer:
a. $13,000
b. $34,000
c. $10,200
Explanation:
a. Calculation to determine the equity at the beginning of the year
Asset = Liabilities + Equity
$29000 = $16000 + Equity
Equity=$29,000-$16,000
Equity = $13,000
Therefore the equity at the beginning of the year is $13,000
b. Calculation to determine the equity at the end of the year
Asset = Liabilities + Equity
$63000 = $29000 + Equity
Equity = $63000-$29,000
Equity=$34,000
c. Calculation to determine how much is net income (loss)
Opening Equity + Issued common stock – dividend + Net income = Closing Equity
$13,000 + $36,700 - $5,500 + Net income = $34,000
$44,200+ Net income = $34,000
Net income=$44,200-$34,000
Net income=$10,200
Therefore the net income is $10,200
Otobai Motor Company just paid a dividend of $1.40. Analysts expect its dividend to grow at a rate of 18 percent for the next three years and then a constant rate of 5 percent thereafter. What is the expected dividend per share at the end of year 5?
a. $2.35.
b. $2.54.
c. $2.91.
d. $1.50.
Answer:
b. $2.54.
Explanation:
The computation of the expected dividend per share at the end of year 5 is shown below:
= Dividend per share × (1 + growth rate)^number of years × (1 + growth rate)^remaining years left
= 1.40 × (1+18%)^3 × (1 + 5%)^2
= $2.54
hence, the expected dividend per share at the end of year 5 is $2.54
We are in a world with a real interest rate of 7%. The economy of Smoothiland is hit by a temporary shock to GDP of 200 million units at time T. The population of Smoothiland have a strong preference for consumption smoothing, and Smoothiland has an open economy.
1. By how much does consumption to fall in time T+1? (in millions, round to the closes decimal).
2. How much does the country have to borrow to maintain smooth consumption? (round to the closest decimal)
Answer:
1. 14.28 million units
2. The country has to borrow 200 million in order to maintain smooth consumption
Explanation:
1. Real interest rate = 7%
Temporary shock to GDP(Y) at Time(T)
= 200 million
Fall of consumption (T) in time T+1 =
So,
Y= C+rY
200=C+(0.07*200)
= C + 14
C = 200/14
= 14.28
Therefore,
Consumption will fall by 14.28 million units
2. The country has to borrow 200 million in order to maintain smooth consumption
Roanoke Company produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (1,827 bars) are as follows: Ingredient Quantity Price Cocoa 600 lbs. $0.40 per lb. Sugar 180 lbs. $0.60 per lb. Milk 150 gal. $1.70 per gal. Determine the standard direct materials cost per bar of chocolate. If required, round to the nearest cent.
Answer:
Roanoke Company
The standard direct materials cost per bar of chocolate is:
= $0.33.
Explanation:
a) Data and Calculations:
A batch of chocolate = 1,827 bars
Standard Costs for a batch:
Ingredient Quantity Price
Cocoa 600 lbs. $0.40 per lb.
Sugar 180 lbs. $0.60 per lb.
Milk 150 gal. $1.70 per gal.
Ingredient Quantity Price Total Cost
Cocoa 600 lbs. $0.40 per lb. $240.00 (600 * $0.40)
Sugar 180 lbs. $0.60 per lb. 108.00 (180 * $0.60)
Milk 150 gal. $1.70 per gal. 255.00 (150 * $1.70)
Total cost of batch of chocolate = $603.00
Cost per bar = $0.33 ($603.00/1,827)
Historical demand for a product is: DEMAND January 13 February 12 March 16 April 13 May 17 June 16 a. Using a weighted moving average with weights of 0.50 (June), 0.30 (May), and 0.20 (April), find the July forecast
Answer: 15.7 units
Explanation:
July forecast = (Weight of June * Demand in June) + (Weight of May * Demand in May) + (Weight of April * Demand in April)
= (0.5 * 16) + (0.3 * 17) + (0.2 * 13)
= 8 + 5.1 + 2.6
= 15.7 units
Country A has a GDP of $4,600 in Country A dollars, and Country B has a GDP of $2,400 in Country B dollars. If the exchange rate is 1.5 Country B dollars to 1 Country A dollar, what is Country B's GDP in Country A dollars
Answer: Country A $1,600
Explanation:
Country A's currency is stronger than Country B's which is why Country B needs more of its currency to buy a single unit of Currency A.
You can use direct proportion to find out Country B's GDP in Country A dollars
Country B currency to Country A
1.5 : 1
2,400 : x
1.5x = 2,400
x = 2,400 / 1.5
= Country A $1,600
The Japanese economy has been experiencing slow growth. As a result the Prime Minister, who thinks John Maynard Keynes was the greatest economist ever, has decided to increase government spending. As head of the economic council the Prime Minister asks you to determine the size of the increase needed to bring the economy to full employment.
Assume there is a GDP gap of 1 billion yen and the marginal propensity to consume (MPC) is .60. What advise do you give the Prime Minister?
a. The recessionary gap is equal to 625 million yen.
b. The inflationary gap is equal to 1 billion yen divided by 2.5 or 0.4 billion yen.
c. The recessionary gap is equal to 1 billion yen divided by 2.5 or 0.4 billion yen.
d. The inflationary gap is equal to 1 billion yen divided by 1.66 or 0.625 billion yen.
Answer:
c. The recessionary gap is equal to 1 billion yen divided by 2.5 or 0.4 billion yen.
Explanation:
The computation is shown below:
The multiplier is
= 1 ÷ (1 - MPC)
= 1 ÷ (1 - 0.60)
= 2.5
Now the increase in government expenditure for closing out the recessionary gap should be
Change in income = change in government purchase × multiplier
100 = change in government purchase × 2.5
So, the change in government purchase should be
= 100 ÷2.5
= 40
Hence, the option c is correct
A company borrowed $4,000 from the bank at an interest rate of 9%. By the end of the accounting period, the loan had been outstanding for 30 days. Demonstrate the required adjusting entry by choosing the correct statement below.
Debit Interest payable for $30.
Credit Unearned revenues for $30.
Credit Interest expense for $30.
