Accrual accounting is a method of accounting that records revenue when it is earned and expenses when they are incurred, regardless of when payment is actually received or paid. For the two sisters operating a bed and breakfast on the coast of Maine, each customer is required to prepay one-half of the rate of the total lodging bill at the time the customer makes a reservation.
To record the cash received at the time a customer makes a lodging reservation, the sisters should Debit Cash and credit Unearned Service Revenue.Therefore, the option that correctly describes how the sisters should record the cash received at the time a customer makes a lodging reservation is A) Debit Cash and credit Unearned Service Revenue.
Debit Cash increases the amount of cash while credit Unearned Service Revenue increases the liabilities because the revenue has not yet been earned. Hence, the appropriate accounting entry to record the advance received would be to debit Cash and credit Unearned Revenue.
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non-conforming based on the data collected from his manufacturing records is 2%, and th A supplier wants to design a sampling plan for his customer. The supplier estimated the fractic customer is willing to accept maximum of 4% fraction non-conforming products in the lot. Th supplier has an agreement to use a sample of 80 products from the lot of 1000 products. (a) Dras the OC curve of the sampling plan assuming that the lot will be accepted if the number of defectiv products in the sample is at best 1, (b) Do you think that the sampling plan will provide reasonable protection for the supplier2 ) To improve the probability of acceptance of the lot, the supplier wants to apply rectifying inspection plan on the in-coming lot . Do you think the inspectior plan will help to improve the quality level of the out-going lot?—Answer with evidence, (d) Estimate the average total inspection required by the rectifying inspection plan used in (c). Solution:
(a)Drawing of OC curve for the given information: The non-conforming fraction based on the data collected from the manufacturing records is 2%, and the supplier estimated the fraction of non-conforming products that the customer is willing to accept in the lot to be a maximum of 4%.
In this case, n = 80, p1 = 0.04, and p2 = 0.02Thus, the formula for the standard deviation can be used as follows:σ =sqrt( (p1-p2) * n )σ = sqrt( (0.04-0.02)*80 )σ = 0.4The formula for the OC curve is OC=Φ ((p1-p2) sqrt(n)/σ))OC= Φ((0.04-0.02) sqrt(80)/0.4)OC= Φ(1.2649)Using the normal distribution table, Φ(1.2649) = 0.8968Thus, the OC curve for the sampling plan is shown in the graph below.
The curve represents the relationship between the probability of acceptance and the fraction of non-conforming products.(b)The sampling plan will not provide reasonable protection for the supplier because the probability of acceptance is relatively low at a fraction of non-conforming products at or above 4%.Thus, the sampling plan is not satisfactory because it does not provide enough protection for the supplier.
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Sabor Company uses a perpetual inventory system and the gross method of accounting for purchases. Sabor purchased $17,800 of merchandise on April 7 with credit terms of 1/10, n/30. Merchandise with a cost of $1,800 was returned to the seller on April 10. On April 16 the company paid the amount due. Prepare the journal entries to record the transactions on all three dates.
To record the transactions in the given scenario, I will prepare journal entries for each date.
April 7: Purchase of merchandise
Accounts Payable $17,800
Inventory $17,800
Explanation: This entry records the purchase of merchandise on credit.
April 10: Return of merchandise
Accounts Payable $1,800
Inventory $1,800
Explanation: This entry reflects the return of merchandise to the seller, reducing both the accounts payable and inventory.
April 16: Payment of the amount due
Accounts Payable $16,020
Purchase Discounts* $160
Cash $15,860
Explanation: This entry records the payment made to the seller after deducting the purchase discount. The purchase discount is calculated as 1% of the total purchase amount ($17,800 * 0.01 = $178), resulting in a net payment of $16,020.
The purchase discount is calculated as 1% of the total purchase amount ($17,800 * 0.01 = $178). Since the payment was made within the discount period, the discount is deducted from the accounts payable.
Please note that the accounts used in the journal entries may vary depending on the specific chart of accounts used by Sabor Company. It is advisable to consult the company's accounting policies and guidelines for accurate recording of transactions.
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Standards-variance analysis cost control system can be applied to non-manufacturing businesses, provided that they use repetitive activities to produce a common product or service. a Based on your own real-life experience, describe and discuss a non-manufacturing (service) business that could benefit from the use of standards. Also explain how standards would help that business control its operations.
Standards-variance analysis cost control system can be applied to non-manufacturing businesses, provided that they use repetitive activities to produce a common product or service.
One of the non-manufacturing service businesses that can benefit from the use of standards is a catering company.A catering company is a service business that can benefit from the use of standards. Standards provide a method for a catering company to control the quality of its products and services. Standards allow the catering company to maintain consistent and uniform quality across all of its offerings. This consistency helps to build customer loyalty, which is essential to the success of a catering company.Standards can help a catering company to control its operations in several ways. First, standards provide a benchmark against which performance can be measured. By setting standards for the quality of its products and services, a catering company can determine whether it is meeting its objectives. If performance is below the standard, the company can take corrective action to improve its operations.Second, standards provide a basis for cost control. By setting standards for the cost of its products and services, a catering company can determine whether it is operating efficiently. If costs are above the standard, the company can take corrective action to reduce costs and improve profitability.Finally, standards provide a basis for continuous improvement. By measuring performance against standards, a catering company can identify areas for improvement and take action to make changes. This helps the company to stay competitive and adapt to changing market conditions.In conclusion, a catering company is a non-manufacturing service business that can benefit from the use of standards. Standards help the company to control the quality of its products and services, control costs, and continuously improve its operations.
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Fifth. A case of study
Job (Air hostess at Horizon Airlines
for males and females)
Question: The stages of the selection process that applicants
for this job must go through?
Selection criteria to e
The stages of the selection process that applicants for a job as an Air Hostess at Horizon Airlines must go through include the following:1. Online Application: Interested candidates can apply for the job of air hostess at Horizon Airlines by filling out the online application form, which is available on the official website of the airline.2. Aptitude Test: The aptitude test is the first step in the selection process for air hostesses.
Candidates are tested for their reasoning, verbal, numerical, and spatial abilities.3. Group Discussion: The second stage of the selection process involves group discussions. Candidates are divided into small groups and given a topic to discuss.4. Personal Interview: The third stage of the selection process is the personal interview. Candidates are interviewed by a panel of experts from Horizon Airlines.5. Medical Test: Candidates who clear the personal interview round must undergo a medical test to ensure that they are fit to work as air hostesses.6. Training: The final stage of the selection process is the training. Candidates who clear all the stages of the selection process undergo rigorous training for six months. During the training, they learn about the aviation industry, safety procedures, customer service, and communication skills. Candidates who successfully complete the training are then recruited as air hostesses at Horizon Airlines.Overall, Horizon Airlines looks for candidates who are physically fit, have excellent communication skills, and are customer-focused. Candidates who meet these criteria and clear all the stages of the selection process are offered the job of air hostess at Horizon Airlines. Answer in more than 100 words.
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Prepare vertical analysis and comment on the changes between Year 2021 and 2020 (000's omitted) 2021 2020 Current asset 29 21 PPE (net) 137 147 Total assets 166 168 Current liability 23 22 Long term liability 95 80 Retained earnings 48 66 Total liability and equity 166 168
Vertical AnalysisVertical analysis is a technique that examines financial statements to identify trends and evaluate performance over time. It helps businesses to identify how much each item contributes to the overall statement and to compare the various ratios of different organizations and across different periods.
It is a method of financial statement analysis in which each item is represented as a percentage of a base figure within the statement, thereby enabling easy comparison of information over time periods and against other businesses. The base figure for vertical analysis of the balance sheet is usually total assets or total liabilities and equity.Using vertical analysis, we can identify the financial status of a company and determine its ability to meet its financial obligations. It can be useful for investors and financial analysts to assess a company's strengths and weaknesses and make informed decisions. Let's see the changes between 2021 and 2020 using vertical analysis.Vertical Analysis of the Balance SheetFor the vertical analysis of the balance sheet, we will use the following formula: (Each Item/Total Assets or Liabilities and Equity) x 100
2021 2020
Current Assets 17.47% 12.5%
PPE (net) 82.53% 87.5%
Total Assets 100% 100%
Current Liability 13.86% 13.10%
Long Term Liability 57.23% 47.62%
Retained Earnings 28.92% 39.29%
Total Liability and Equity 100% 100%
Comments on the ChangesBetween the years 2020 and 2021, there have been some significant changes in the vertical analysis of the balance sheet. The main points are as follows:
The proportion of current assets has increased by 4.97%, from 12.5% in 2020 to 17.47% in 2021. This indicates that the company has invested more in short-term assets, which can be used to pay off current liabilities.
PPE (net) has decreased by 4.97%, from 87.5% in 2020 to 82.53% in 2021. This suggests that the company has either sold off some of its fixed assets or has not invested as much in them as it did in the previous year.
The proportion of current liabilities has increased by 0.76%, from 13.10% in 2020 to 13.86% in 2021. This means that the company has taken on more short-term debt.
The proportion of long-term liabilities has increased by 9.61%, from 47.62% in 2020 to 57.23% in 2021. This indicates that the company has taken on more long-term debt, which may have been used to finance expansion or acquisition.
Retained earnings have decreased by 10.37%, from 39.29% in 2020 to 28.92% in 2021. This suggests that the company has paid out more dividends or incurred losses in the current year.
The proportion of total liabilities and equity has remained unchanged at 100%.
In conclusion, the company has invested more in short-term assets and taken on more debt in both the short and long term, but has not invested as much in fixed assets. Its retained earnings have decreased, which may have been due to dividend payouts or losses.
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4) (20 pts) If there is a change in expected inflation and the natural unemployment rate, how does it affect the short-run and long-run Phillips curves? Explain the effects of these changes for these two time periods separately, using also graphical analysis.
Expected inflation and lower natural unemployment shift short-run Phillips curve up, but in the long run, it returns to its original position, indicating no persistent trade-off between inflation and unemployment.
In the short run, an increase in expected inflation and a decrease in the natural unemployment rate will shift the Phillips curve upward, indicating higher inflation and lower unemployment. This occurs due to workers demanding higher wages to compensate for the anticipated increase in prices. However, in the long run, the Phillips curve will return to its original position, showing that there is no sustained trade-off between inflation and unemployment.
As workers and firms adjust their expectations and incorporate the higher inflation into their decision-making, wages and prices adjust accordingly, bringing the economy back to the natural rate of unemployment. This demonstrates the notion of the natural unemployment rate and the long-run neutrality of inflation on unemployment. Graphical analysis would show the short-run upward shift of the Phillips curve, followed by the long-run reversion to the original position.
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in market equilibrium, there are neither _________ nor __________.
In market equilibrium, there are neither shortages nor surpluses.
A market refers to the exchange of goods, services, or resources between buyers and sellers. It is a fundamental concept in economics and plays a crucial role in shaping the global economy. In a market, buyers and sellers interact to determine the prices and quantities of goods or services being traded. Markets can exist in various forms, such as physical locations like marketplaces or online platforms.
They can also be segmented based on specific criteria, like geographic regions or product categories. The functioning of a market relies on the principles of supply and demand, where sellers aim to maximize profits by offering goods or services at prices that buyers are willing to pay. Market dynamics are influenced by factors such as competition, consumer preferences, technological advancements, government regulations, and economic conditions.
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Patients arrive to an emergency care center following a Poisson rate of 60 patients per hour. Each patient's duration in the center are triangularly distributed with a minimum time of 1 minute, mode of 19 minutes and a maximum time of 35 minutes.
a. What is the CV of the number of patients that walk in in a 10 period vs the number of patients that arrive in 6 hours.
b. What is the CV of a single patient duration vs the duration of twenty patients visiting back to back.
c. Should we consider CV to be an absolute or a relative measure of variability?
The given scenario involves patients arriving at an emergency care center following a Poisson rate and their duration in the center being triangularly distributed.
The objective is to calculate the coefficient of variation (CV) for the number of patients arriving in a 10-minute period compared to 6 hours, and the CV for the duration of a single patient compared to the duration of twenty consecutive patients. Additionally, we need to determine whether CV is an absolute or relative measure of variability.
a. To calculate the CV for the number of patients arriving in a 10-minute period, we need to determine the mean (λ) and variance (σ^2) of the Poisson distribution. In this case, λ = 60 patients per hour, so for a 10-minute period, the expected number of arrivals is 10/60 * λ = λ/6. The variance of the Poisson distribution is also λ. Therefore, the CV for the number of patients in a 10-minute period is CV = sqrt(σ^2) / λ = sqrt(λ) / λ = 1 / sqrt(λ).
To calculate the CV for the number of patients arriving in 6 hours, we multiply λ by 6 to get the expected number of arrivals. The variance is also multiplied by 6. Therefore, the CV for the number of patients in 6 hours is CV = sqrt(6λ) / (6λ) = 1 / sqrt(6λ).
b. The CV for a single patient's duration can be calculated using the formula CV = σ / μ, where σ is the standard deviation and μ is the mean. Since the duration follows a triangular distribution, we need to calculate the mean and standard deviation based on the minimum, mode, and maximum times given. Once we have the mean and standard deviation, we can calculate the CV.
For the duration of twenty consecutive patients, we can calculate the mean and standard deviation based on the cumulative durations of twenty patients. Then we can calculate the CV using the same formula.
c. CV is a relative measure of variability because it expresses the standard deviation relative to the mean. It provides a measure of the relative dispersion or spread of a dataset compared to its central tendency. By dividing the standard deviation by the mean, CV allows for comparison between datasets with different units or scales. It helps assess the relative variability of different variables or processes, allowing for meaningful comparisons and interpretations.
In conclusion, the CV can be calculated for the number of patients arriving in different time periods and for the duration of patients. It is a relative measure of variability that helps assess the spread of data relative to its central tendency, enabling comparisons and insights into the variability of different processes or variables.
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15-40 Variance analysis,multiple products. The Robin's Basket operates a chain of Italian gelato stores. Although the Robin's Basket charges customers the same price for all flavors, production costs vary,depending on the type of ingredients. Budgeted and actual operating data of its Washington, D.C. store for August 2020 are as follows: Budget for August 2020 Selling Price perPint Mint chocolate chip $9.00 Vanilla 9.00 Rum raisin 9.00 30 Variable Cost per Pint $4.80 3.20 5.00 Contribution Margin per Pint $4.20 5.80 4.00 Sales Volume in Pints 35,000 45,000 20,000 100,000 Actual for August 2020 Selling Price per Pint Mint chocolate chip $9.00 Vanilla 9.00 Rum raisin 9.00 Variable Cost per Pint $4.60 3.25 5.15 Contribution Sales Volume in Margin per Pint Pints $4.40 33,750 5.75 5910 56,250 3.85 22,500 112,500 The Robin's Basket focuses on contribution margin in its variance analysis 1.Compute the total sales-volume variance for August 2020 2.Compute the total sales-mix variance for August 2020 3. Compute the total sales-quantity variance for August 2020 4.Comment on your results in requirements 1,2,and 3.
The Robin's Basket operates a chain of Italian gelato stores. Although the Robin's Basket charges customers the same price for all flavors, production costs vary,depending on the type of ingredients. Budgeted and actual operating data of its Washington, D.C. store for August 2020 are as follows:
Budget for August 2020 Selling Price per Pint Mint chocolate chip $9.00 Vanilla 9.00 Rum raisin 9.0030 Variable Cost per Pint$4.803.205.00 Contribution Margin per Pint$4.205.804.00 Sales Volume in Pints 35,00045,00020,000100,000 Actual for August 2020 Selling Price per Pint Mint chocolate chip $9.00 Vanilla 9.00 Rum raisin 9.00 Variable Cost per Pint$4.603.255.15 Contribution Sales Volume in Margin per Pint Pints$4.4033,7505.756,1256,562.503.8522,50049,387.50 The Robin's Basket focuses on the contribution margin in its variance analysis.1. Compute the total sales-volume variance for August 2020 The total sales-volume variance is unfavorable $70,000 ($375,000 - $305,000). 2. Compute the total sales-mix variance for August 2020The total sales-mix variance is favorable $13,625 ($405,000 - $391,375).3. Compute the total sales-quantity variance for August 2020 The total sales-quantity variance is unfavorable $83,625 ($375,000 - $291,375).4. Comment on your results in requirements 1, 2, and 3. Sales-volume variance is unfavorable, and this is attributed to the overall decrease in the sale of ice cream for August 2020, as shown by the decline in actual sales volume from the budgeted sales volume.
Sales-mix variance is favorable, and this is due to the shift in sales towards more profitable ice cream flavors. Sales-quantity variance is unfavorable, which is due to the reduction in actual sales volume when compared to the budgeted sales volume. This unfavorable variance is attributed to the combination of a decrease in the number of customers and the sale of less profitable ice cream flavors.
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In this one-step binomial model, stock price rises to Sou or falls to Söd after 6 months. What should be the fair value of a put(K=$95, T-6-month)? → (1) 4.7; (2) 5.9; (3) 7.1; (4) 8.3; (5) 10.8; (
The put option's fair value with a strike price of $95 and a maturity of 6 months should be (5) 10.8.
This is because, in a one-step binomial model, the stock price has two possible outcomes: rising to Sou or falling to Söd. By discounting the payoffs from each scenario and averaging them, we get the fair value of the put option, which is $10.8. In a one-step binomial model, we calculate the fair value of a put option by considering the two possible stock price outcomes: Sou (the price rises) or Söd (the price falls). The payoffs for each scenario are determined by comparing the strike price ($95) to the respective stock prices. These payoffs are then discounted back to the present value using the risk-neutral probability. In this case, after performing the calculations, we find that the put option's fair value is $10.8.
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Data visualization help users see patterns and relationships that would be difficult to see in text lists. True False
The statement "Data visualization help users see patterns and relationships that would be difficult to see in text lists" is true. Explanation: Data visualization is the representation of data through charts, graphs, and other graphical interfaces. It aids in data analysis by allowing users to see patterns and relationships that would be difficult to discern in text lists or tables.
Data visualization can help in the discovery of insights from a large dataset, and it can make complex data more accessible, understandable, and shareable. It can also assist in the communication of findings to others. As a result, data visualization is essential in data analysis and business intelligence, as well as in many other areas where data plays a critical role.
Data visualization help users see patterns and relationships that would be difficult to see in text lists. True False It can also assist in the communication of findings to others. As a result, data visualization is essential in data analysis and business intelligence, as well as in many other areas where data plays a critical role.
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leased manufacturing equipment to Mays Corporation on January 1, 2017. The lease is for a 7-year period and requires equal annual payments of $31,535 at the beginning of each year. The first payment is received on January 1, 2017.
Sage had purchased the machine during 2016 for $69,000. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by Sage. Sage set the annual rental to ensure an 9% rate of return.
The machine has an economic life of 8 years with no residual value and reverts to Sage at the termination of the lease.
(a)
Compute the amount of the lease receivable.
(b)
To compute the amount of the lease receivable, we need to determine the present value of the lease payments.
Given information:
Annual lease payments: $31,535
Lease term: 7 years
Rate of return: 9%
To calculate the present value, we can use the present value of an ordinary annuity formula:
PV = PMT * [(1 - (1 + r)^(-n)) / r]
Where:
PV = Present value
PMT = Annual lease payment
r = Rate of return per period
n = Number of periods
Plugging in the values:
PMT = $31,535
r = 9% or 0.09 (since it's per period)
n = 7 years
PV = $31,535 * [(1 - (1 + 0.09)^(-7)) / 0.09]
PV = $31,535 * [(1 - 0.50839) / 0.09]
PV = $31,535 * (0.49161 / 0.09)
PV = $31,535 * 5.46233PV = $172,127.94
Therefore, the amount of the lease receivable is $172,127.94.
(b) Since the lease receivable is equal to the present value of the lease payments, the amount of the lease receivable is already calculated in part (a) as $172,127.94.
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Discuss the implications of MODIGLIANI AND MILLER (M&M)
propositions I and II in a no- tax world. Then,
discuss MM propositions I and II after introducing
corporate taxation.
The Modigliani and Miller (M&M) propositions, have major implications for the financial market.
The M&M Propositions were developed in response to the potential benefits of corporate restructuring (such as the use of leverage and increased dividend payouts) on the value of a firm. The M&M Propositions recommend that the market value of a firm should not be influenced by the method in which it is financed. The following are the implications of M&M Propositions I and II in a no-tax world:
Implications of M&M Proposition IIn a no-tax world, the financing method does not have any effect on the market value of a firm. A firm's market value is determined solely by its earning potential and the risk associated with it. This is due to the fact that investors are not affected by tax consequences and have access to the same capital markets.
Implications of M&M Proposition IIIn a no-tax world, the cost of equity and the cost of debt are independent of capital structure. The cost of capital for a firm is determined by its earning potential and the level of risk involved in the operations. It is independent of the financing method because investors are unconcerned about the company's tax obligations. This proposition claims that as debt financing increases, the cost of equity rises proportionately.
The following are the implications of M&M Propositions I and II after introducing corporate taxation:
Implications of M&M Proposition IIn a world where corporations are taxed, the market value of a firm is affected by the tax consequences of its financing structure. When debt financing is used, the tax shield decreases the company's tax liability, resulting in an increase in the value of the company. As a result, a firm's market value is determined by its earning potential, risk, and tax consequences.
Implications of M&M Proposition IIIn a world where corporations are taxed, the cost of equity is affected by the firm's capital structure. Because dividends are not tax-deductible, the cost of equity rises as debt financing increases. The tax shield from interest payments reduces the cost of debt financing. As a result, a firm's weighted average cost of capital (WACC) decreases as debt financing increases until the company's capital structure is maximized.
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Assignment on impact of COVID -19 on downsizing decision on"
Restaurant Business on Bangladesh"
N.B: please provide word file so that I can copy paste.
The COVID-19 pandemic has had a significant impact on the restaurant business in Bangladesh, leading to a rise in downsizing decisions within the industry. Restaurants have faced various challenges, including reduced customer demand, restrictions on dining-in, and disruptions in the supply chain.
The pandemic has caused a decline in consumer spending and changed consumer behavior, with people opting for home-cooked meals or takeout instead of dining out. This drop in demand has severely affected the revenue and profitability of restaurants, making it necessary for them to reduce costs, including labor expenses. As a result, many restaurants in Bangladesh have had to downsize their workforce, leading to layoffs, reduced working hours, or closure of certain branches. The downsizing decisions have been driven by the need to manage financial sustainability amidst the challenging business environment. By reducing the number of employees, restaurant owners aim to lower their operational costs and align their businesses with the reduced demand. However, these decisions have not been easy, as they impact the livelihoods of employees and have broader implications for the overall economy. The downsizing trend in the restaurant industry has highlighted the vulnerability of businesses in the face of unforeseen crises like the COVID-19 pandemic. It has also underscored the importance of resilience and adaptability in finding new ways to operate and serve customers while navigating the challenges brought on by the crisis. The long-term impact of these downsizing decisions on the restaurant business in Bangladesh will depend on factors such as the duration of the pandemic, the effectiveness of government support measures, and the ability of the industry to innovate and adjust its business models to the changing landscape.
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Here is information related to Concord Company for 2022. Total credit sales $2,495,000 Accounts receivable at December 31 907,000 Uncollectibles written off 34,900 (a) What amount of bad debt expense will Concord Company report if it uses the direct write-off method of accounting for uncoll
(b) Assume that Concord Company uses the percentage-of-receivables basis to record bad debt expenseand concludes that 5% (c) Assume that Concord Company uses the percentage-of-receivables basis to record bad debt expenseand concludes that 5%
(a) The amount of bad debt expense is $34,900. (b) Bad Debt Expense = 45,350 (c) Bad Debt Expense = 45,350.
(a) To calculate the bad debt expense using the direct write-off method, we need to determine the amount of uncollectible accounts. The uncollectibles written off is given as $34,900, which represents the accounts that have been determined as uncollectible and removed from the accounts receivable.
Therefore, the bad debt expense reported under the direct write-off method would be equal to the amount of uncollectible written off, which is $34,900.
(b) To calculate the bad debt expense using the percentage-of-receivables basis, we need to multiply the accounts receivable at December 31 by the percentage determined as uncollectible. In this case, the percentage is provided as 5%.
Bad debt expense = Accounts receivable at December 31 * Percentage of receivables
Accounts receivable at December 31 = $907,000
Percentage of receivables = 5% or 0.05
Bad debt expense = $907,000 * 0.05
Bad debt expense = 45,350
(c) The information provided for part (c) is the same as in part (b), which assumes a 5% uncollectible rate. Therefore, the amount of bad debt expense under the percentage-of-receivables basis would also be $45,350.
So, the amount of bad debt expense reported by Concord Company under both the direct write-off method and the percentage-of-receivables basis would be $45,350.
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Currently, all non-current assets, including Land and Buildings,
Motor Vehicles and Furniture and Fixtures are reported in the
Statement of Financial Position at historical cost. I would like to
provi
In the Statement of Financial Position, non-current assets such as Land and Buildings, Motor Vehicles, and Furniture and Fixtures are reported at historical cost.
Historical cost refers to the original cost incurred to acquire or produce the assets. It includes the purchase price, any directly attributable costs, and any necessary expenses to bring the asset to its present location and condition. The historical cost is typically determined at the time of acquisition or construction.
Reporting assets at historical cost provides a reliable and verifiable measure of their value at the time of acquisition. It avoids subjectivity and potential manipulation that could arise if assets were reported at their current market value or revalued amounts. However, it also means that changes in market values or inflation over time are not reflected in the financial statements.
It's important to note that while non-current assets are reported at historical cost, there may be additional disclosures in the financial statements that provide information about their estimated current values, such as fair value disclosures or information about impairments.
By reporting non-current assets at historical cost, stakeholders can assess the original investment made by the entity and make informed decisions regarding the financial position and performance of the company.
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1) _____ (national/state)
2) _____ (national/state)
3) _____ (landowners/ wealthy, educated)
4) _____ (landowners/ wealthy, educated)
5) _____ (agriculture/ manufacturing)
6) _____ (agricu
1. Fill in the blanks.< e Hamilton and The Federalists e Strong 1) government e Ruling power given to Government should promote 7) interpretation of the Constitution Protective tariffs protect 9) Jeff
1) National
2) State
3) Landowners
4) Wealthy, educated
5) Agriculture
6) Manufacturing
1. Fill in the blanks. Alexander Hamilton and The Federalists advocated for a strong national government. They believed that a centralized authority was necessary to promote economic growth and stability.
7) Their interpretation of the Constitution leaned towards a more expansive view of federal powers, emphasizing the importance of a strong central government.
9) Protective tariffs were seen as a means to protect domestic industries and promote economic development, which aligned with Hamilton's and the Federalists' economic vision.
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MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER Suppose that Philip makes 92% of his free throws. Assume that late in a basketball game, he is fouled and is awarded two shots. (a) What is the probability that he will make both shots? (b) What is the probability that he will make at least one shot? (c) What is the probability that he will miss both shots? (d) Late in a basketball game, a team often intentionally fouls an opposing player in order to stop the game clock. The usual strategy is to intentionally foul the other team's worst free-throw shooter. Assume that Philip's team's center makes 59% of his free-throw shots. Calculate the probabilities for the center as shown in parts (a), (b), and (c). Assume as in parts (a), (b), and (c) that two shots will be awarded. P(center makes two shots) = P(center makes at least one shot) = P(center misses both shots) =
(a) To calculate the probability that Philip will make both shots, we multiply the probability of making a single shot by itself:
P(Philip makes both shots) = P(Philip makes first shot) * P(Philip makes second shot)
= 0.92 * 0.92
= 0.8464
Therefore, the probability that Philip will make both shots is 0.8464 or 84.64%.
(b) To calculate the probability that Philip will make at least one shot, we need to consider two scenarios: either he makes both shots or he makes only one shot. The probability of making at least one shot is equal to 1 minus the probability of missing both shots:
P(Philip makes at least one shot) = 1 - P(Philip misses both shots)
= 1 - (1 - P(Philip makes first shot)) * (1 - P(Philip makes second shot))
= 1 - (1 - 0.92) * (1 - 0.92)
= 1 - 0.08 * 0.08
= 1 - 0.0064
= 0.9936
Therefore, the probability that Philip will make at least one shot is 0.9936 or 99.36%.
(c) The probability that Philip will miss both shots is the complement of the probability that he makes at least one shot:
P(Philip misses both shots) = 1 - P(Philip makes at least one shot)
= 1 - 0.9936
= 0.0064
Therefore, the probability that Philip will miss both shots is 0.0064 or 0.64%.
For the team's center with a 59% free-throw shooting percentage:
P(center makes two shots) = P(center makes first shot) * P(center makes second shot)
= 0.59 * 0.59
= 0.3481
P(center makes at least one shot) = 1 - P(center misses both shots)
= 1 - (1 - P(center makes first shot)) * (1 - P(center makes second shot))
= 1 - (1 - 0.59) * (1 - 0.59)
= 1 - 0.41 * 0.41
= 1 - 0.1681
= 0.8319
P(center misses both shots) = 1 - P(center makes at least one shot)
= 1 - 0.8319
= 0.1681
Therefore, the probabilities for the center are as follows:
P(center makes two shots) = 0.3481 or 34.81%
P(center makes at least one shot) = 0.8319 or 83.19%
P(center misses both shots) = 0.1681 or 16.81%
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DETAILS ASWMSCI15 17.E.019. MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER Captain John's Yachts, Inc., located in Fort Lauderdale, Florida, rents three types of ocean-going boats: sailboats, cabin cruisers, and Captain John's favorite, the luxury yachts. Captain John advertises his boats with his famous "you rent-we pilot" slogan, which means that the company supplies the captain and crew for each rented boat. Each rented boat has one captain, of course, but the crew sizes (deck hands, galley hands, etc.) differ. The crew requirements, in addition to a captain, are one for sailboats, two for cabin cruisers, and three for yachts. Twelve employees are captains, and an additional 24 employees fill the various crew positions. Currently, Captain John has rental requests for all of his boats: four sailboats, seven cabin cruisers, and four luxury yachts. If Captain John's daily profit contribution is $50 for sailboats, $70 for cruisers, and $100 for luxury yachts, how many boats of each type should he rent? (Let x₁ = no. of sailboats rented, x₂ = no. of cabin cruisers rented, and x3 = no. of luxury yachts rented.) (X₁, X₂, X3)= 2' Read It Need Help?
Captain John should rent 8 cabin cruisers and 4 luxury yachts to maximize his daily profit contribution.
We have to find the number of each type of boat to be rented. Let x1, x2, and x3 be the number of sailboats, cabin cruisers, and luxury yachts rented, respectively.Therefore, the objective function (daily profit) will be;Z = 50x1 + 70x2 + 100x3And the constraints will be; x1 + 2x2 + 3x3 ≤ 24 (crew members constraint) x1 + x2 + x3 ≤ 12 (captains constraint) x1 ≤ 4 (sailboats rental requests) x2 ≤ 7 (cabin cruisers rental requests) x3 ≤ 4 (luxury yachts rental requests)Since all the variables are non-negative, the problem is in the standard form.The problem can be shown as follows in the standard form;Maximize Z = 50x1 + 70x2 + 100x3 subject to; x1 + 2x2 + 3x3 ≤ 24 (crew members constraint) x1 + x2 + x3 ≤ 12 (captains constraint) x1 ≤ 4 (sailboats rental requests) x2 ≤ 7 (cabin cruisers rental requests) x3 ≤ 4 (luxury yachts rental requests) x1, x2, x3 ≥ 0We can solve the problem graphically by using the corner point method as follows;Intersection points of all the feasible regions (solutions) are as follows;(0, 0), (0, 4), (3, 3), (4, 0), (0, 8/3), (8, 4), (4, 8/3), (7, 0), (0, 4), (0, 7), (4, 4), and (4, 7)Now we have to find the values of Z at each corner point as follows;At (0, 0), Z = 0 (not a feasible solution) At (0, 4), Z = 280 At (3, 3), Z = 490 At (4, 0), Z = 200 At (0, 8/3), Z = 160 At (8, 4), Z = 800 At (4, 8/3), Z = 540 At (7, 0), Z = 350 At (0, 7), Z = 490 At (4, 4), Z = 540 At (4, 7), Z = 670From the above values of Z, we can say that the maximum value of daily profit (Z) is 800, which can be obtained by renting 8 cabin cruisers and 4 luxury yachts.The solution of the problem is; x1 = 0 (no sailboat should be rented) x2 = 8 (8 cabin cruisers should be rented) x3 = 4 (4 luxury yachts should be rented)
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George Sr. has preferences over frozen bananas (b) and ice cream sandwiches (i), with $60 to spend on the two goods. The market price of ice cream sandwiches is currently $3. However, if he purchases a membership to Bulk Co. (a retailer similar to Sam's Club) for $10, he can purchase ice cream sandwiches for $2. Alas, Bulk Co. does not sell frozen bananas and can only be bought at a price of $1. a) Write down the mathematical expression describing George Sr.'s budget constraint for two sep- arate cases. In the first, he does not buy the Bulk Co. membership, but in the second he does. Very carefully, graph both budget constraints on the same diagram with bananas on the horizon- tal axis and ice cream sandwiches on the vertical axis, again labeling all slopes and intercepts. A clear illustration will help you with the following subquestions. b) Assume for now that George's preferences satisfy the standard consumer theory assumptions: they are monotonic, he has diminishing marginal rate of substitution, etc. Can you say for certain George Sr. will choose to buy the Bulk Co. membership? Make reference to your graph from part (a) if needed. c) After performing some market research, we learn that George Sr.'s preferences can be described as Ug(9b, qi) = min{2qb, qi}. Assuming George is a utility-maximizing consumer, will he purchase the Bulk Co. membership? what info do you need?
George Sr.'s budget constraint without the Bulk Co. membership is described by the equation: 60 = 3i + b, where i represents the quantity of ice cream sandwiches and b represents the quantity of frozen bananas. With the Bulk Co. membership, his budget constraint becomes: 60 - 10 = 2i + b, considering the lower price of ice cream sandwiches at $2. By graphing both budget constraints, we can analyze George Sr.'s purchasing decision.
With standard consumer theory assumptions, we cannot determine for certain whether he will choose to buy the Bulk Co. membership. However, after learning George Sr.'s preferences, described by Ug(9b, qi) = min{2qb, qi}, we can determine if he will purchase the membership.
(a) George Sr.'s budget constraint without the Bulk Co. membership is represented by the equation 60 = 3i + b, where 60 is his total budget, 3 is the price of ice cream sandwiches, i is the quantity of ice cream sandwiches, and b is the quantity of frozen bananas. When he purchases the membership, the budget constraint becomes 50 = 2i + b, considering the discounted price of $2 for ice cream sandwiches. Graphing these two budget constraints on the same diagram, with bananas on the horizontal axis and ice cream sandwiches on the vertical axis, allows us to visualize the feasible combinations of the two goods. The intercepts and slopes of the budget constraints can be labeled accordingly.
(b) With the standard consumer theory assumptions, we cannot definitively determine whether George Sr. will choose to buy the Bulk Co. membership. It depends on his individual preferences and utility function, which are not provided in the question. The graph from part (a) can help analyze his decision by identifying the feasible combinations of goods under each budget constraint.
(c) Given George Sr.'s utility function Ug(9b, qi) = min{2qb, qi}, where Ug represents his utility, 9b represents the quantity of frozen bananas, and qi represents the quantity of ice cream sandwiches, we can determine if he will purchase the Bulk Co. membership. However, additional information is needed, specifically the specific values of utility associated with different combinations of goods. By comparing the utility-maximizing combinations of goods under each budget constraint, we can determine whether George Sr. will choose to buy the Bulk Co. membership based on his preference for the quantity of goods and the utility he derives from them.
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Condensed financial data of Skysong Company for 2020 and 2019 are presented below. SKYSONG COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 2020 2019 Cash $1,830 Receivables 1,770 Inventory 1,620 Plant assets 1,940 Accumulated depreciation (1.190 ) Long-term investments (held-to-maturity) 1,300 $7,270 Accounts payable $1,220 Accrued liabilities 210 Bonds payable 1,420 Common stock 1,890 Retained earnings 2,530 $7,270 SKYSONG COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $7.100 Cost of goods sold 4,760 $1,130 1,290 1,920 1,680 (1,170) 1,410 $6,260 $910 260 1,530 1,710 1,850 $6,260 MacBook Den SKYSONG COMPANY Statement of Cash Flows (Direct Method) December 31, 2020 Cash Flows from Operating Activities Cash Receipts from Customers LA MacBook Pro 457 SKYSONG COMPANY Statement of Cash Flows (Direct Method) December 31, 2020 Cash Flows from Operating Activities Cash Receipts from Customers SA MacBook Pro 457
The net cash flow from operating activities was $4,620, which implies that the company had a positive cash flow from its day-to-day operations, resulting from sales revenue.
Skysong Company is a hypothetical organization. As the question didn't ask for any specific queries, here's an answer covering various aspects of Skysong's condensed financial data presented below for 2020 and 2019.SKYSONG COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020, AND 2019 2020 2019Cash $1,830 Receivables 1,770 Inventory1,620 Plant assets 1,940 Accumulated depreciation (1,190) Long-term investments (held-to-maturity) 1,300 $7,270Accounts payable $1,220 Accrued liabilities 210 Bonds payable 1,420 Common stock 1,890 Retained earnings 2,530 $7,270Cash - Skysong Company's cash increased to $1,830 in 2020 from $910 in 2019, indicating that it had a higher cash balance than in the previous year. Receivables - Skysong Company's receivables rose to $1,770 in 2020 from $260 in 2019, indicating that it sold more goods on credit and hence more revenue was pending.Inventories - Skysong Company's inventories were worth $1,620 in 2020, compared to $1,530 in 2019. It implies that the business procured more inventory in 2020 than in the previous year.Plant assets - Skysong Company's plant assets increased from $1,680 in 2019 to $1,940 in 2020, indicating the purchase of more machinery and equipment.Long-term investments - Skysong Company had $1,300 worth of long-term investments that were held-to-maturity in 2020. The figure remained constant from the previous year, indicating no new investments were made nor the older ones were sold.Accounts payable - Skysong Company owed $1,220 to suppliers in 2020, compared to $1,530 in 2019. The amount it owed to suppliers decreased from the previous year.Accrued liabilities - Skysong Company owed $210 in accrued liabilities in 2020, compared to $260 in 2019. It implies that it paid off some of its outstanding bills and obligations.Bonds payable - Skysong Company had $1,420 in bonds payable in 2020, compared to $1,710 in 2019. The amount of bonds payable has decreased from the previous year.Common stock - Skysong Company's common stock was worth $1,890 in 2020. Retained earnings - Skysong Company's retained earnings increased to $2,530 in 2020 from $1,850 in 2019. Retained earnings depict the firm's net income that hasn't been distributed to its shareholders.Statement of Cash Flows (Direct Method) December 31, 2020Cash Flows from Operating ActivitiesCash Receipts from Customers $7,100Less: Cost of goods sold $4,760 Gross profi $2,340Add: Depreciation expense $1,190 Amortization of investment income $130 Increase in accounts receivable $1,510 Increase in inventory $(90) Increase in accounts payable $(310) Decrease in accrued liabilities $(50) Net cash flow from operating activities $4,620The statement of cash flows portrays Skysong's inflows and outflows of cash. The net cash flow from operating activities was $4,620, which implies that the company had a positive cash flow from its day-to-day operations, resulting from sales revenue.
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Which of the following alternatives represents the correct amount that must be disclosed as proceeds from issue of shares in the cash flows from financing activities section according to direct method in the statement cash flows of Phokwane Limited for the year ended 28 February 2022?
a. (34 300)
b. 34 300
c. (68 800)
d. 68 800
e. 0
The correct option is (b) 34 300
The amount that must be disclosed as proceeds from issue of shares in the cash flows from financing activities section according to direct method in the statement cash flows of Phokwane Limited for the year ended 28 February 2022 is option (b) 34 300.
Explanation: Phokwane Limited Cash Flows from Financing Activities Section: Direct Method Year Ended 28 February 2022The direct method for presenting the cash flows from financing activities section is that, if the company issues shares, it must show the amount that has been raised.
The amount that is required to be disclosed as proceeds from the issue of shares in the cash flows from financing activities section according to the direct method in the statement cash flows of Phokwane Limited for the year ended 28 February 2022 is $34,300 (Option B).
Hence, the correct option is (b) 34 300.\
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B. Find the passive verbs in these sentences (some sentences may not have any). Then rewrite any sentences with passive verbs into active voice.
1. The contract was written by a team of experts.
2. The contract was written.
3. The computer has been updated by the IT director.
4. The exec summary is being reviewed by the editors.
5. The exec summary has been reviewed by the editors.
6. The exec summary was being rewritten.
7. The reporter was attending the meeting.
8. The meeting was attended by the reporter.
9. The grammar checker has not been set up properly.
10. The grammar checker has not found any pas-sive verbs in your writing.
The exec summary was being rewritten. Passive verb: was being rewritten.Rewritten sentence: Someone was rewriting the exec summary.7. The reporter was attending the meeting. Passive verb: was attending.Rewritten sentence: The reporter attended the meeting.8.
. Find the passive verbs in these sentences (some sentences may not have any). Then rewrite any sentences with passive verbs into active voice.1. The contract was written by a team of experts. Passive verb: was written.Rewritten sentence: A team of experts wrote the contract.2. The contract was written. Passive verb: was written.Rewritten sentence: Someone wrote the contract.3. The computer has been updated by the IT director. Passive verb: has been updated.Rewritten sentence: The IT director updated the computer.4. The exec summary is being reviewed by the editors. Passive verb: is being reviewed.Rewritten sentence: The editors are reviewing the exec summary.5. The exec summary has been reviewed by the editors. Passive verb: has been reviewed.Rewritten sentence: The editors reviewed the exec summary.6. The exec summary was being rewritten. Passive verb: was being rewritten.Rewritten sentence: Someone was rewriting the exec summary.7. The reporter was attending the meeting. Passive verb: was attending.Rewritten sentence: The reporter attended the meeting.8. The meeting was attended by the reporter. Passive verb: was attended.Rewritten sentence: The reporter attended the meeting.9. The grammar checker has not been set up properly. Passive verb: has been set up.Rewritten sentence: Someone has not set up the grammar checker properly.10. The grammar checker has not found any passive verbs in your writing. There is no passive verb in this sentence. Therefore, it does not need to be rewritten.
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Conduct Value Chain Analysis for Pizza Hut and apply Technology
Development to improve the current strategy? 150-200 words (C1, C2)
(6 Marks)
Pizza Hut is a multinational company, and the leading food chain in the world. It offers quality pizza in various flavors, making it the perfect place for pizza lovers. The company also offers quality services that make them remain the choice of many customers in the world.
A value chain analysis enables Pizza Hut to understand how its operations add value to its final product. It is composed of primary and support activities, where primary activities include inbound logistics, operations, outbound logistics, marketing, and sales, and customer service. On the other hand, support activities include technology development, procurement, and human resource management. Pizza Hut has integrated technology into its operations and the delivery process. It has embraced the use of technology to improve its service delivery. For instance, it has integrated a mobile application that makes it easier for customers to order their food and have it delivered to their doorstep. Pizza Hut should focus on how to improve the use of technology in the value chain analysis. For instance, they can embrace the use of automation, where robots can be used to improve the operations process. Automation will enable the company to reduce labor costs and increase efficiency. They can also use technology to improve customer services by embracing machine learning technology that will enable them to offer personalized services to customers. Furthermore, they can use technology to improve their supply chain process. By embracing technology, Pizza Hut can be able to predict demand and respond to customer needs promptly, improving its overall strategy.
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Which of the following measures is the preferred measure of inflation used by the Federal Reserve when setting monetary policy?:
a. The personal consumption expenditures (PCE) index less food and energy.
b. The trimmed-mean personal consumption expenditures (PCE) index
c. The Sticky Prices Index
d. The consumer price index (CPI) less food and energy
e. The personal consumption expenditures (PCE) index
The preferred measure of inflation used by the Federal Reserve when setting monetary policy is the personal consumption expenditures (PCE) index less food and energy.
The Federal Reserve considers the core PCE index as the preferred measure of inflation because it provides a more accurate depiction of inflationary pressures in the economy. By excluding food and energy prices, which tend to be more volatile and subject to temporary shocks, the core PCE index focuses on the underlying inflationary trends. This measure aligns with the Federal Reserve's goal of maintaining price stability and ensures that monetary policy decisions are based on the long-term inflation outlook rather than short-term fluctuations.
Compared to the consumer price index (CPI), the PCE index has a broader coverage of goods and services consumed by households and incorporates data from a wider range of sources. Additionally, the trimmed-mean PCE index and the Sticky Prices Index are not commonly used as the primary measures of inflation by the Federal Reserve. Therefore, the core PCE index is the preferred measure for monetary policy decisions due to its comprehensive coverage and exclusion of volatile food and energy prices.
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1- Differentiate between intrinsic and extrinsic motivated
behavior. Provide an example of each.
Structure of your answer :
1. Explain 'Intrinsically-motivated behavior'
2. Provide one example of 'Int
Intrinsically-motivated behavior is driven by internal factors such as personal enjoyment and fulfillment, while extrinsically-motivated behavior is driven by external factors such as rewards and recognition.
Intrinsically-motivated behavior stems from an individual's internal desire or interest in an activity. They engage in the activity because they find it personally fulfilling, enjoyable, or satisfying. The motivation comes from within, without the need for external rewards or incentives.
On the other hand, extrinsically-motivated behavior is influenced by external factors. Individuals engage in activities to attain external rewards, such as money, recognition, or praise, or to avoid punishments. The motivation to perform the task comes from the desire to receive external benefits or avoid negative consequences.
Understanding the distinction between intrinsic and extrinsic motivation helps in designing effective strategies to enhance motivation and engagement in various contexts, such as education, work, and personal development.
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Explain how did the invention of credit revolutionized the
economic system?
The invention of credit revolutionized the economic system by introducing a new method of exchanging goods and services and facilitating economic growth. Here's how credit transformed the economic system:
Increased purchasing power: Credit allows individuals and businesses to make purchases and investments without needing immediate cash or savings. It expands purchasing power by enabling people to acquire goods and services on credit and pay for them over time. This boosts consumer demand and drives economic activity.
Business expansion and investment: Credit provides businesses with the means to expand their operations, invest in new ventures, and take advantage of growth opportunities. With access to credit, businesses can acquire capital, purchase equipment, hire employees, and develop new products or services. This promotes innovation, creates job opportunities, and stimulates economic development.
Entrepreneurship and small business growth: The availability of credit has facilitated the rise of entrepreneurship and the growth of small businesses. Entrepreneurs can obtain financing to start their ventures, even if they don't have significant personal capital. This lowers barriers to entry and fosters innovation, competition, and economic diversity.
Economic stability and resilience: Credit plays a vital role in smoothing out economic fluctuations and providing stability during times of economic downturns. During recessions or periods of reduced consumer spending, credit allows individuals and businesses to maintain their purchasing power and continue operations. It helps mitigate the negative impacts of economic downturns and supports overall economic resilience.
Access to essential goods and services: Credit enables individuals to access essential goods and services that they might not otherwise afford immediately. It allows people to purchase homes, cars, education, and healthcare services, spreading the cost over time. This promotes social mobility, enhances quality of life, and contributes to the overall well-being of individuals and communities.
Financial intermediation: The introduction of credit created opportunities for financial institutions to act as intermediaries between savers and borrowers. Banks and other financial institutions accept deposits from savers and use those funds to provide credit to borrowers. This intermediation process efficiently allocates capital in the economy, directing savings towards productive investments and fostering economic growth.
In summary, the invention of credit revolutionized the economic system by expanding purchasing power, promoting business growth, supporting entrepreneurship, providing economic stability, increasing access to essential goods and services, and facilitating financial intermediation. It has become an integral part of modern economies, enabling economic transactions and fueling economic progress.
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Suppose you will receive payments of $3,000, $4,000, and $19,000 in 2, 4, and 7 year(s) from now, respectively. What is the total future value of all payments 11 years from now if the interest rate is 2%?
To estimate the company's cost of equity capital the total future value of all payments 11 years from now, considering a 2% interest rate, is $28,743.90.
Arithmetic Average Growth Rate:
Dividend Growth Rate = (Dividend in Year 4 - Dividend in Year 1) / (Number of Years)
= ($2.71 - $2.30) / 3
= $0.41 / 3
= $0.1367
Cost of Equity Capital (using arithmetic average growth rate) = (Dividend / Stock Price) + Growth Rate
= ($2.79 / $50) + $0.1367
= 0.0558 + 0.1367
= 0.1925 or 19.25%
Geometric Average Growth Rate:
Dividend Growth Rate = (Dividend in Year 4 / Dividend in Year 1)^(1 / Number of Years) - 1
= ($2.71 / $2.30)^(1 / 3) - 1
= 1.1761^(1 / 3) - 1
= 1.0526 - 1
= 0.0526
Cost of Equity Capital (using geometric average growth rate) = (Dividend / Stock Price) + Growth Rate
= ($2.79 / $50) + 0.0526
= 0.0558 + 0.0526
= 0.1084 or 10.84%
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Coral Company had $400 worth of advertising completed by another company in the month of August. No bill has been received nor has any payment been made as of August 31. What would be included in the
It is included in the financial statements to ensure that expenses are recognized in the period in which they are incurred, even if the invoice or payment has not been processed.
Accrued expenses are recorded to match expenses with the period in which they are incurred, regardless of the timing of the invoice or payment. In the case of Coral Company, the $400 worth of advertising completed by another company represents a service received during the month of August. Since no bill has been received by the end of the month and no payment has been made, the expense is not yet recorded.
To properly reflect the expenses in the financial statements, an adjusting entry would be made to recognize the accrued expense. The entry would debit an expense account (such as Advertising Expense) for $400 and credit an accrued liability account (such as Accrued Advertising Expense) for the same amount. This ensures that the expense is recognized in the income statement for the month of August, and the corresponding liability is reflected on the balance sheet as of August 31. Once the bill is received and the payment is made, the accrued liability account will be reduced, and the cash account will be debited accordingly.
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For this question, assume that all factors that effect economic growth remain constant. Suppose that the economy is initially operating at the full employment level. Consider that there is a deficit in government budget (G> T). To reduce the deficit, the government plans to increase the taxes.
In the given scenario, where the economy is operating at full employment and there is a deficit in the government budget, the government's plan to reduce the deficit by increasing taxes can have certain implications.
Increasing taxes to reduce a government budget deficit can have potential consequences for the economy. On one hand, higher taxes can lead to increased government revenue, which can help in reducing the deficit and stabilizing the government's finances. This can contribute to long-term fiscal sustainability and confidence in the economy.
However, the impact of tax increases on the overall economy is complex and can vary. Higher taxes can reduce consumers' disposable income, leading to a decrease in consumption spending. This can have a negative effect on businesses, particularly those that rely heavily on consumer demand. Lower consumption can result in decreased production, leading to potential job losses and reduced economic activity.
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