Answer:
Par value of bonds = $257,000
Issue price of bonds = 99
Cash receipts from issue of bonds = 257,000 x 99% = 254,430
Discount on bonds payable = Par value of bonds - Cash receipts from issue of bonds
= 257,000-254,430
= $2,570
Date Account Titles and Explanation Debit Credit
March 1 Cash $254,430
Discount on bonds payable $2,570
Bonds payable $257,000
(To record issuance of bonds)
Determine the market price that Firm A receives for its product. Assume the price is constant because the firm is a price taker in a perfectly competitive market.
Answer: $28
Explanation:
In a Perfectly Competitive Market, firms are price takers in that the price is set by the market. As a result, the Price is equal to the Average Revenue as well as the Marginal Revenue. P = AR = MR
In the table, the Marginal Revenue (increase in revenue when an additional unit is sold) is $28 for all quantities and the Average Revenue at the fifth (and all units) is;
= 140/5
= $28
With both the Average and Marginal Revenues being $28, the price that Firm A receives is $28 as well.
In years fair, you want to emphasize preventive health care. You found that a few employees take advantage of preventive health care options provided by the company. Which of the following statements is most likely to encourage employees to take action?
Answer: C. Feel better in less than 30 days and focus on your long-term wellness. This presentation will show you the many cost-free preventative health care options available to you that make a difference now and in the future.
Explanation:
Here are the options for the question:
A. Most people don't take action until it's too late. This presentation will show you the many preventative health care options available to you that have lasting and positive impacts now and in the future.
B. Most people don't take action until it's too late. This presentation will show you the many preventative health care options that help you avoid health crises now and in the future.
C. Feel better in less than 30 days and focus on your long-term wellness. This presentation will show you the many cost-free preventative health care options available to you that make a difference now and in the future.
From the question, we are informed that for a fair, emphasis want to be placed on preventive health care as it is found that only few employees take advantage of preventive health care that the company provides.
The most likely option that will encourage the workers to take action is option C "Feel better in less than 30 days and focus on your long-term wellness. This presentation will show you the many cost-free preventative health care options available to you that make a difference now and in the future".
The message conveyed in option C is simple and focus on different cost-free preventative health care options available and also on the short term impact and long term impact on one's health.
When Steve is talking about his communications with employees, he says, "I constantly check in." The information Steve gets from employees during these check-ins is an example of
Answer:
Upward communication
Explanation:
Based on this information it can be said that this is an example of Upward communication. This is a form of communication that encourages employees to communicate directly with their upper management in order to create a sense of importance in employees as they begin to realize that the upper management cares about their thoughts and input. Which is what Steve is cultivating by having regular check-ins
What's the term for the illegal practice of nudging buyers away from or toward a specific area based on the presence or absence of protected class members
Answer: steering
Explanation:
Steering is an illegal practice whereby people that are looking for homes are channeled towards particular areas based on their social status or race.
In such scenarios, the choice of the person looking for a home is being influenced by the person's gender, color, race, status, religion, disability, or national origin.
An auto parts shop carries an oil filter for trucks. The annual demand for the oil filter is roughly 1200 units. The ordering cost per order for the auto parts shop is $80; the holding cost of carrying 1 unit is $1.2 per year. The shop has 360 working days per year. The lead time is usually 12 working days. Determine the annual total relevant, including ordering and carrying, cost. g
Answer:
$480
Explanation:
The first step would be to calculate the Economic order quantity. The formula for calculating the economic order quantity is as under:
Step 1: Find Economic Order Quantity
EOQ = Square-root (2* Annual demand * Ordering cost per order / Holding cost per unit per year)
Here
Annual demand is 1200 units
Ordering cost per order is $80
Holding cost per unit per year is $1.2 and
By putting values, we have:
EOQ = Square-root (2 * 1200 Units * $80 / $1.2)
= 400 Units
Step 2: Find Total ordering cost
Now, we will find Total ordering cost by using the following equation:
Total Ordering Cost = Number of Orders * Ordering cost per order
Here
Ordering cost per order is $80
Number of orders = Annual Demand / EOQ = 1200 units / 400 units
Number of orders = 3 orders per year
By putting values in the above equation, we have:
Total Ordering Cost = 3 * 80 = $240
Step 3: Find Annual Carrying Cost
By using the following formula we will find Annual Carrying Cost
Annual Carrying Cost = (EOQ ÷ 2) * Holding cost per unit per year
By putting values we have:
Annual Carrying Cost = (400 ÷ 2) * $1.2 = $240
Step 4: Now we will find Total Annual Inventory Cost by using the following equation:
Total Annual Inventory Cost = Annual ordering cost (Step 2) + Annual carrying cost (Step 3)
By putting values, we have:
Total Annual Inventory Cost = $240 + $240 = $480
What role, if any, should the U.S. government take in this issue of setting fair wages in developing countries?
Answer:
Corporations of the United States should be tracked by the U.S government to ensure that workers' rights in developing countries should not be compromised.
Explanation:
In many developing countries political leaders are afraid that if wage rates are enforced on big corporations they could be forced off global markets. Foreign investment capital is significant to the economy of developing countries and there is always fear that the loss of such investment may break the economies of these countries. The government of the U.S should ensure vigorous monitoring programs that require businesses to report the location of international factories publicly so that human rights organizations can track their actions independently.
Warner Company purchases $50,500 of raw materials on account, and it incurs $65,000 of factory labor costs. Supporting records show that:_______. A) the Assembly Department used $31,700 of raw materials and $38,300 of the factory labor.B) the Finishing Department used the remainder.
Answer:
1. The Journal Entry for the above will be as follows;
a.
DR Work in Progress - Assembly $31,700
DR Work in Progress - Finishing $ 18,800
CR Raw Materials $50,500
Working
Finishing Department used remainder = 50,500 - 31,700
= $18,800
b.
DR Work in Progress - Assembly $38,300
DR Work in Progress - Finishing $ 26,700
CR Factory Wages $65,000
Working
Finishing Department used remainder = 65,000 - 38,300
= $65,000
The Bridal Gift Shop, Inc. has 11 units in ending merchandise inventory on December 31. The units were purchased in November for $150 each. The price lists from suppliers indicate the current replacement cost of the item to be $152 each. What would be the amount reported as Merchandise Inventory on the balance sheet?
A $1,650
B. $3.322
C. $1,672
D. $302
Answer:
A $1,650
Explanation:
The computation of amount reported as Merchandise Inventory on the balance sheet is shown below:-
Merchandise inventory = Ending merchandise inventory × Units purchased
= 11 × $150
= $1,650
Therefore for computing the Merchandise Inventory we simply applied the above formula and have not considered the replacement cost as it is not relevant.
A company's net sales were $678,400, its cost of goods sold was $218,810, and its net income was $35,550. Its gross margin ratio equals:
Answer:
The answer is 67.75 percent
Explanation:
Gross profit margin is a measure of profitability.
Gross margin ratio = (gross profit ÷ net revenue/sales) x 100 percent.
Gross profit = net sales - cost of sales
Net sales - $678,400
Cost of sales - $218,810
Gross profit = $678,400- $218,810
= $459,590
Now gross margin ratio:
($459,590/$678,400) x 100 percent
= 67.75 percent
The representative firm's total revenue (TR) for selling the profit-maximizing level of output is
Answer: $787.50
Explanation:
Firms maximise their profit levels at the point where Marginal Revenue equals Marginal Cost because at this point any increase in Cost will not bring about more additional revenue.
The point where MR = MC is point A where sales are 225 units and price is $3.50.
The Total Revenue = Price * Quantity
= 225 * 3.50
= $787.50
A firm sells peanuts in a perfectly competitive market. Upon increasing production output from 60 packages to 75 packages, the total revenue increased from $300 to $375. What was the marginal revenue of this increase in production?
Answer:
$75
Explanation:
A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
The price per unit = $300 / 60 = $5
The marginal revenue for one unit is $5
Production increased by 15 units, so marginal revenue increased by $5 × 15 = $75
I hope my answer helps you
In some cases, analysts notice that groups of similar investors tend to flock to stocks that have dividend policies consistent with their financial needs. This circumstance is an illustration of:
Answer:
the clientele effect
Explanation:
This scenario best illustrates the concept/idea known as the clientele effect. This is the idea that a set of investors that are attracted to specific security/asset will affect the price of it when policies or circumstances change. This is mainly due to the fact that as a group with lots of buying power, purchasing those assets removes circulating supply from that asset which causes the price to go up, meaning if things change they can also sell which will cause prices to drop.
Fallen Company commonly issues long-term notes payable to its various lenders. Fallen has had a pretty good credit rating such that its effective borrowing rate is quite low (less than 8% on an annual basis). Fallen has elected to use the fair value option for the long-term notes issued to Barclay's Bank and has the following data related to the carrying and fair value for these notes.
Carrying Value Fair Value
December 31,2014 54,000 54,000
December 31,2015 44,000 42,500
December 31,2016 36,000 38,000
A. Prepare the journal entry at December 31 (Fallen's year end) for 2014, 2015, and 2016 to record the fair value option for these notes.B. At what amount will the note be reported on Fallen's 2015 balance sheet?C. What is the effect of recording the fair value option on these notes on Fallen's 2016 income?D. Assuming that general market interest rates have been stable ove the period, does the fair value data for the notes indicate that Fallen's credit-worthiness has improved or declined in 2016? Explain.
Answer:
A) Journal entries
Date Account Titles Debit Credit
Dec 31, 2014 No Journal Entry
Dec 31,2015 Notes Payable $1,500
(44,000 – 42,500)
Unrealized Holding Gain/Loss $1,500
(Net Income)
Dec 31,2016 Unrealized Holding Gain/Loss $3,500
(Net Income)
Notes Payable $3,500
(38,000 – 36,000 + 1,500)
B) The note will be reported at the fair value of notes payable as on 31 December 2015. Therefore, the note will get reported at $42,500 in the Fallen's 2015 balance sheet.
C) Fallen's 2016 net income will get reduced by $3,500 (refer to journal entry 3) as any change in fair value will be reported as an adjustment to the net income for the respective year.
D) Since, the general market interest rates have been stable over the period and similar risk investment in the year 2016, the changes in fair value indicate that Fallen's creditworthiness has improved.
Communication skills refer to a manager’s ability to effectively convey ideas and information to others and to effectively receive ideas and information from others. This exercise focuses on communication skills as they involve deciding how to best convey information to others.Exercise BackgroundAssume that you are a middle manager for a large electronics firm. People in your organization generally use one of three methods to communicate with one another. One common method is verbal communication, either face-to-face or by telephone. Surprisingly, people also still use a lot of written communication in the form of memos, reports, letters, and other documentation. And, of course, there is also a lot of digital communication such as email and direct messaging.During a typical day you receive and send a variety of messages and other communication, sometimes using only a single method of communication but often using some combination of methods. The questions that follow ask you to select one or more methods that would be most effective for communicating specific kinds of information.Use your communication skills to answer the following questions.1. You need to reprimand a staff assistant who has been coming in to work late for the last several days. Which of these options would most likely be both efficient and effective? Check all that apply.Send an emailRegardless of what you do first, follow-up with a written reprimand to the individual’s personnel fileUse social mediaReprimand the individual in public so as to deter others from being lateSchedule a meeting to discuss the problem2. You need to schedule a meeting with your boss. Which of these options would most likely be both efficient and effective? Check all that apply.Call the boss’s assistant and request a meetingEmail the boss’s assistant and request a meetingWrite a formal letter to your boss asking for a meeting3. You need to inform a supplier that your company will soon be cutting back on its purchases because you plan to shift more of your business to a supplier offering lower prices. Which of these options would most likely be both efficient and effective? Check all that apply.A telephone call to the supplier to explain the situationAn email to the supplier to explain the situationA letter to the supplier to explain the situationA personal meeting with the supplier to explain the situation
Answer:
Communication Skills:
1. Reprimanding a staff assistant for late-coming:
Schedule a meeting to discuss the problem
2. Scheduling a meeting with your boss:
Call the boss's assistant and request a meeting.
3. Informing a supplier that your company will soon be cutting back on its purchases because you plan to shift more of your business to suppliers offering lower prices:
A telephone call to the supplier to explain the situation
An email to the supplier to explain the situation
Explanation:
Communication is a two-way traffic. The central purpose is to enhance understanding. In reprimanding a staff assistant, I shall first understand the problem he or she is facing. Full understanding of a problem generates workable solutions. Responding to problems without some created solution mechanisms will not ensure lasting relationships. The main purpose in any communication situation is to achieve understanding of the challenges being faced by the other party, whether with my assistant, my boss's assistant, or my company's supplier.
A firm issues six-month commercial paper with $500,000 face value and receives $488,000. What is the EAR the firm is paying for these funds? Group of answer choices
Answer:
5.03%
Explanation:
In order to compute the effective annual rate on the commercial paper,we need to first of all establish the interest rate in the six-month instrument
interest=($500,000-$488,000)/$488,000=2.46%
Effective annual rate=(1+2.46% /6)^12-1
By dividing by six, we are reducing the rate to monthly terms
By raising to the power of 12 we are converting from a monthly rate to yearly rate
Effective annual rate=5.03%
Christina will receive annuity payments of $1,200 a year for five years, with the first payment occurring at Year 4. What is the value of this annuity to her today at a discount rate of 7.25 percent
Answer:
The annuity is worth $3,693.99 today.
Explanation:
Giving the following information:
Cash flow= $1,200
Number of years= 5
Waiting years= 4
Discount rate= 7.25%
First, we will determine the future value:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
FV= {1,200*[(1.0725^5) - 1]} / 0.0725
FV= $6,935.40
Now, we can calculate the present value:
PV= FV/(1+i)^n
PV= 6,935.40/ (1.0725^9)
PV= $3,693.99
Mannisto, Inc., uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $244,087 and average assets of $1,550,550. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $44,110 more than under FIFO, and its average assets would have been $40,630 less than under FIFO.
a) Calculate the firm's ROA under each cost flow assumption.
b) Suppose that two years later costs and prices were falling. Under FIFO, net income and average assets were $288,567 and $1,880,970, respectively. If LIFO had been used through the years, inventory values would have been $45,690 less than under FIFO, and current year cost of goods sold would have been $22,660 less than under FIFO. Calculate the firm's ROA under each cost flow assumption.
Answer and Explanation:
a. The solution of return on assets under each cost flow is described below:-
Return on assets under FIFO = Net income ÷ Average total assets
= $244,087 ÷ $1,550,550
= 15.7%
Return on assets under LIFO = Net income ÷ Average total assets
= ($244,087 - $44,110) ÷ ($1,550,550 - $40,630)
= $199,977 ÷ $1,509,920
= 13.2%
b. The computation of return on assets under each cost flow is shown below:-
Return on assets under FIFO = Net income ÷ Average total assets
= $288,567 ÷ $1,880,970
= 15.3%
Return on assets under LIFO = Net income ÷ Average total assets
= ($288,567 + $22,660) ÷ ($1,880,970 - $45,690)
= $311,227 ÷ $1,835,280
= 17%
If a check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period, in preparing this period's reconciliation, the amount of this check should be: g
Answer:
If the outstanding check was not cancelled by the bank yet, then it must be subtracted from the bank account balance when you are preparing a reconciliation of the bank account.
The person or business that received the check will eventually cash it out, so there is no reason why you should consider that money in your bank account as yours. checks are basically cash payments that may or may not be delayed. Checks last 6 months before they expire, so there is still a lot of time for the person or business to cash it.
Answer:
Explanation:
The check is still outstanding (still not subtracted by bank) so add it to the book balance to obtain the bank balance.
When an HRM professional utilizes SWOT analysis, and strategic thinking about external and internal competitive issues impacting the company, including political, economic, market, social, geographic, and technological trends, this is called:
Answer:
Environmental scanning.
Explanation:
When an HRM professional utilizes SWOT analysis, and strategic thinking about external and internal competitive issues impacting the company, including political, economic, market, social, geographic, and technological trends, this is called environmental scanning.
Environmental scanning can be defined as a management strategy that focuses on systematically acquiring informations about occasions, trends, events or patterns through surveys and analysis of these information in an organisation's external and internal environment.
This simply means that, if an organization wants to succeed and remain competitive in the industry, it is necessary and utterly important that it regularly scans its environment so that it can assess its growth or developments and understand critical factors which contributed to its success.
Hence, the environmental scanning is classified into two (2) main categories and these are;
1. Internal environmental scanning: it is made up of essential elements or components that lie within an organization such as objectives, culture, value systems, mission, vision, goals, organizational structure, employees etc.
2. External environmental scanning: it is made up of essential elements or components that outside of an organization such as customers, market, rivals, politics, economic policies, demography etc.
Generally, the internal environmental scanning offers an organization Strength and Weakness while the external environmental scanning provides information about Opportunities and Threats. These four influencing environmental factors are known as the SWOT analysis (strength, weakness, opportunity and threats).
With the aforementioned four environmental factors, an organization is able to make strategic business decisions by identifying available opportunities and threats affecting the business, as well as used is strengths and improve on its weaknesses.
On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?
Answer: $210
Explanation:
When using the First In First Out (FIFO) method of Inventory Valuation, the company sells the goods that it acquired earliest first and then sells the goods acquired later last.
This company sold 30 units on August 15.
That would mean that using FIFO, the company sold all of its August opening inventory of 15 units. It also sold all 10 units purchased on August 5th and then sold 5 units from the August 12th purchase of 20 units.
= 15 + 10 + 5
= 30 units
This means that the only units left are;
= 20 - 5
= 15 units of the August 12th purchase are left.
Units cost $14 each.
Value of Inventory after sale = 15 units * 14
= $210
why should you always double check the citation generated using a citation generator
A customer opens a margin account by purchasing 100 shares of ABC at $60 per share, depositing the 50% Regulation T requirement. The stock rises to $80 per share on the next day and then falls to $60 per share on the day after. The account will now show:
Answer:
Account Balance in margin account:
Investment = $6,000 (100 x $60)
The customer's account will first increase with an unrealized gain of $2,000 ($80 - 60 x 100) on the next day. It will then decrease with an unrealized loss of $2,000 ($80 - 60 x 100) on the day after. This cancels the earlier unrealized gain.
Explanation:
The customer's investment will now show a balance of $6,000 with a contra account showing a debt of $3,000 for the balance of the Regulation T margin account. According to investopedia, "A margin account is a brokerage account in which the broker lends the customer cash to purchase stocks or other financial products. The loan in the account is collateralized by the securities purchased and cash, and comes with a periodic interest rate."
Zahn Inc. sold 11,500 annual magazine subscriptions for $61 during December 20Y4. These new subscribers will receive monthly issues, beginning in January 20Y5. Zahn Inc. issued a $123,200, 180–day, 5% note payable on December 1, 20Y4. On March 31, 20Y5, Zahn Inc. had accounts payable of $ 22,700 and accrued wages payable of $6,700.
Required:
Prepare the Current Liabilities section of the balance sheet for Zahn Inc. on March 31, 20Y5.
Answer:
Zahn Inc.
Current Liabilities Section of the Balance Sheet
March 31, 20Y5
Current liabilities Amount
Accounts payable $22,700
Accrued wages payable $6,700
Accrued interest payable $3,080
($123,200 * 5% * 6/12)
Notes payable $123,200
Advances on magazine subscriptions $526,125
(11,500 * $61 * 9/12)
Total current liabilities $681,805
"An 8% corporate bond with 20 years left to maturity is currently trading at 120. The bond is callable in 4 years at 104. If a client buys the bond and then the issuer calls it in 4 years, the yield to call will be:"
Answer:
The yield to call will be 6%.
Explanation:
Yield to call (YTC) refers to the return a bondholder will receive in the event that he holds the bond until the call date which is sometime before the maturity date.
The YTC can be calculated using the following formula:
YTC = (C + (CP - P) / t) / ((CP + P) / 2) .......................... (1)
Where:
YTC = YTW = yield to call or yield to worst = ?
C = Annual coupon interest payment = Bond interest rate * Bond face value = 8% * $100 = $8.00
CP = Callable price of the bond = $104
P = Current price of the bond = $120
t = time in years remaining until the call date = 20 - 4 = 16 years
Substituting the values into equation (1), we have:
YTC = ($8 + ($104 - $120) / 16) / (($104 + $120) / 2)
YTC = $7 / $112 = 0.06, or 6%.
Therefore, the yield to call will be 6%.
Scampini Technologies is expected to generate $125 million in free cash flow next year, and FCF is expected to grow at a constant rate of 3% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 12%. If Scampini has 65 million shares of stock outstanding, what is the stock's value per share
Answer:
$21.37
Explanation:
Firm value = FCF1 / (WACC – g)
Firm value = $125,000,000/(0.12 – 0.03)
Firm value = $1,388,888,888.89
Equity value per share = Equity value / Shares outstanding
Equity value per share = $1,388,888,888.89 / 65,000,000
Equity value per share = $21.37
Suppose the Finnish government undertakes a program that relaxes immigration but only for highly skilled workers. This policy changes will result in an increase in the ________, causing _______.
Answer:
Suppose the Finnish government undertakes a program that relaxes immigration but only for highly skilled workers. This policy changes will result in an increase in the _population of immigrants_______, causing __increased economic performance resulting from increased supply of highly skilled labor, productivity, and GDP and not to forget increased diversity with its attendant benefits and costs_____.
Explanation:
Immigration is the movement of non-natives or citizens into a country from other countries. If the number of immigrants outnumber those emigrating, the population of the country will increase relatively. To boast population, increase diversity, and energize an economy, some countries deliberately embark on programed immigration and acceptance of highly skilled workers. As they come in, they come with their families, some will bear more children, and there will be increased relationships between the immigrants and the domiciled citizen population. The economy of the country will be revitalized since they are highly skilled workers, and there will be increased productivity and beneficial changes in the GDP. Human diversity has many attendant benefits and burdens. Whichever one that outweighs the other depends on factors prevalent in the particular country.
At the beginning of the current year, Penguin Corporation (a calendar year taxpayer) has accumulated E & P of $55,000. During the year, Penguin incurs a $36,000 loss from operations that accrues ratably. On October 1, Penguin distributes $40,000 in cash to Holly, its sole shareholder.
How is Holly taxed on the distribution?
Of the $40,000 distribution, ...........................$ is taxed as a dividend and $ ....................represents a return of capital.
Answer:Of the $40,000 distribution, ....$28,000....................... is taxed as a dividend and $12,000...................represents a return of capital.
Explanation:
we will first compute dividend income for Holly
Loss from operations in the year =$36,000
Loss accrued till October 1st, since it accrues ratably
January - September= 9 months
36,000 x 9/12 = $27,000
But E&P at start of the year = $55,000
Therefore, E&P at October 1st = $55,000- $27,000 = $28,000
The remaining balance. $28,000 after the losses accrued have been deducted will be treated as dividend income
From the statement, the total cash distributed to Holly is $40,000,
$28,000 as calculated from above Is taxed as a dividend and $12,000 ( $40,000- $28,000) represents a return of capital.
g Last year, Adventure Enterprises reported revenues of $24 million while its total expenses were $10 million. Based on this information, Adventure reported:
Answer:
The answer is ' a profit of $14 million
Explanation:
Revenue = $24 million
Total expenses = $10 million
Profit(loss) = Revenue minus total expenses
$24 million - $10 million
Profit = $14 million.
It is a profit because revenue is greater than total expenses. Adventure Enterprises will report a loss if reported total expenses was greater than reported revenue
There are several ways that governments can increase or decrease the money supply. Match the descriptions below with the corresponding policy tool. It is possible that a description does not apply to any of the terms.
1. Open Market Operations
2. Reserve Requirement
3. Discount Rate
4. Quantitative Easing
A. A government printing more currency.
B. An increase in government spending.
C. An increase in the interest rate that a central bank charges commercial banks for loans.
D. A central bank purchasing existing bonds.
E. An increase in the percentage of deposits that banks must keep on hand.
F. A central bank purchasing a large quantity of longer-term Treasury bonds.
Answer:
1. Open Market Operations - A central bank purchasing existing bonds.
When the central bank purchases existing bonds, this is an expansionary monetary policy because by buying bonds they are putting money back into people's hands by paying them for the bonds.
2. Reserve Requirement - An increase in the percentage of deposits that banks must keep on hand.
When the Central bank increases the reserve requirement, it means that banks should keep a larger percentage of deposits kept with them. This is a contractionary Monetary Policy because the banks will have less money to loan out to the public.
3. Discount Rate - An increase in the interest rate that a central bank charges commercial banks for loans.
The Central bank loans money to commercial banks using the discount rate. Should they increase this rate, banks would find it more expensive to borrow from them and reduce borrowing. This means that they would then not have a lot of money to loan out making this a contractionary monetary policy.
4. Quantitative Easing - A central bank purchasing a large quantity of longer-term Treasury bonds.
Quantitative Easing refers to the Government buying a large quantity of longer-term treasury bonds to increase money supply so that rates would fall and people can borrow more money to boost the economy. This policy is not usually done and indeed is considered unconventional.
Quality Move Company made the following expenditures on one of its delivery trucks:
Mar. 20 Replaced the transmission at a cost of $1,970.
June 11 Paid $1,455 for installation of a hydraulic lift.
Nov. 30 Paid $56 to change the oil and air filter.
Prepare journal entries for each expenditure.
Journal
Accounting Equation
Date Description Post. Ref. Debit Credit Assets Liabilities Equity
1
2
3
4
5
6
Answer with its Explanation:
On 20th of March, The replacement of transmission is not the maintenance cost as it is the replacement of asset within the delivery truck, hence it must be capitalized.
The Double entry would be:
Dr Delivery Truck 1,970
Cr Cash $1,970
On 11th of June, the installation of hydraulic lift is an addition of upgraded asset in the delivery truck hence it must be capitalized.
The Double entry would be:
Dr Delivery Truck $1,455
Cr Cash $1,455
On 30th of November, the changing of oil and air filer is repair and maintenance cost and hence must be treated as under:
Dr Repairs and Maintenance Expense $56
Cr Cash $56