The strategic initiatives are the elements of the balanced scorecard that represent action plans implemented by management to achieve strategic objectives (option a).
Strategic initiatives are specific projects or activities designed to drive progress and alignment with the overall strategy of the organization. These initiatives are typically identified through strategic planning and are aimed at addressing key challenges, seizing opportunities, or improving specific areas of performance. By implementing strategic initiatives, organizations can translate their strategic objectives into actionable steps and allocate resources accordingly.
These initiatives often involve cross-functional collaboration, resource allocation, and monitoring of progress towards desired outcomes. Strategic initiatives play a critical role in driving organizational change, fostering innovation, and ensuring the execution of the strategic vision. They provide a roadmap for achieving the desired outcomes and help organizations stay focused on their strategic priorities. The correct option is a.
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Shamrock Corp. owes Pharoah Corp. a $ 119,700, 10-year, 10% note issued at par plus $ 11,970 of accrued interest. The note is due today, December 31, 2020. Because Shamrock Corp. is in financial trouble, Pharoah Corp. agrees to forgive the accrued interest and $ 10,840 of the principal, and to extend the maturity date to December 31, 2023. Interest at 10% of the revised principal will continue to be due on December 31 of each year. Assume the market rate of interest is 10% at the date of refinancing. Shamrock and Pharoah prepare financial statements in accordance with IFRS.
A.) Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, determine if this is a settlement or a modification. (Hint: Refer to Chapter 3 for tips on calculating.)
B.) Prepare a schedule of the debt reduction and interest expense for the years 2020 through 2023. (Do not leave any answer field blank. Enter 0 for amounts.)
C.) Calculate the gain or loss for Pharoah Corp. and prepare a schedule of the receivable reduction and interest income for the years 2020 through 2023. (Round answers to 0 decimal places, e.g. 5,275. Do not leave any answer field blank. Enter 0 for amounts.)
D.) Prepare all the necessary journal entries on the books of Shamrock Corp. for the years 2020, 2021, and 2022. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
E.) Prepare all the necessary journal entries on the books of Pharoah Corp. for the years 2020, 2021, and 2022. Assume that Pharoah had not previously recognized any impairment. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
To determine if this is a settlement or a modification, calculations using factor tables, financial calculator, or Excel function PV should be employed."
In order to determine whether the agreement between Shamrock Corp. and Pharoah Corp. constitutes a settlement or a modification, calculations need to be performed using factor tables, a financial calculator, or Excel function PV. These calculations will help analyze the financial impact of forgiving accrued interest and reducing the principal, as well as extending the maturity date.
By comparing the revised terms with the original terms of the note, the nature of the agreement can be determined. It is important to consider the market rate of interest and follow the guidelines of IFRS in preparing the financial statements. Based on the calculations, a conclusion can be drawn regarding the appropriate classification of the transaction as a settlement or a modification.
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the income paid to a market maker is referred to as the spread. question content area bottom part 1 true false
False. The income paid to a market maker is not referred to as the spread.
The spread refers to the difference between the bid price and the ask price of a financial instrument. It represents the cost of trading and is typically the income earned by the market maker for facilitating the transaction. The market maker plays a crucial role in providing liquidity to the market by quoting both the bid and ask prices and standing ready to buy or sell the asset.
The spread is calculated as the ask price minus the bid price, and it represents the profit margin for the market maker. When a buyer purchases the asset, they pay the ask price, and when a seller sells the asset, they receive the bid price. The difference between these two prices, the spread, compensates the market maker for their services.
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Vandelay Industries processes and pays payroll semimonthly. The company processed their payroll for the second half of March 2022 using the data shown below. The pay period is for the dates 3/16/22 – 3/31/22, and the paychecks are dated Thursday, 3/31/22. • Gross payroll for salaries and wages is $375,000 • Federal income tax is withheld at a rate of 15% for all employees • State income tax is withheld at a rate of 3% for all employees • Social Security (OASDI) is taxed at 6.2% for EE and ER • Medicare is taxed at 1.45% for EE and ER • FUTA is taxed at 0.6% • SUI is taxed at 3.2% • No employees have reached the OASDI, FUTA, or SUI taxable wage limits for the year • 401(k) withholdings are $35,000 • Benefits (i.e., health, dental, vision, etc.) withholdings are $20,000 Prepare two journal entries: 1) The payroll journal entry to record the salaries and wages expense of the company and net pay to employees 2) The journal entry Vandelay should record for ER payroll tax expense
Vandelay Industries processes and pays payroll semimonthly. The company processed their payroll for the second half of March 2022 using the data shown below: Payroll Journal Entry: Date: 3/31/22
Debit: Salaries and Wages Expense - $375,000
Credit: Cash - Net Pay to Employees - $XXX (Amount after all withholdings and deductions)
Debit: Federal Income Tax Withholding - $56,250 (15% of $375,000)
Debit: State Income Tax Withholding - $11,250 (3% of $375,000)
Debit: Social Security (OASDI) Tax Payable - Employee Portion - $23,250 (6.2% of $375,000)
Debit: Medicare Tax Payable - Employee Portion - $5,437.50 (1.45% of $375,000)
Debit: 401(k) Withholdings - $35,000
Debit: Benefits Withholdings - $20,000
Credit: Cash - Gross Payroll - $XXX (Total gross payroll of $375,000)
Employer Payroll Tax Expense Journal Entry: Date: 3/31/22
Debit: Payroll Tax Expense - Employer's Portion of Social Security (OASDI) Tax - $23,250 (6.2% of $375,000)
Debit: Payroll Tax Expense - Employer's Portion of Medicare Tax - $5,437.50 (1.45% of $375,000)
Debit: FUTA Tax Payable - $2,250 (0.6% of $375,000)
Debit: SUI Tax Payable - $12,000 (3.2% of $375,000)
Credit: Social Security (OASDI) Tax Payable - Employer Portion - $23,250
Credit: Medicare Tax Payable - Employer Portion - $5,437.50
Credit: FUTA Tax Expense - $2,250
Credit: SUI Tax Expense - $12,000
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In 2022, the enacted tax rate is 25% for all current and future years, and Hynde Corp., in its first year of operations, reports $502,000 of pretax financial income and $469,000 of taxable income.
In 2023, an enacted law changes the tax rate for all current and future years to 20%, and Hynde has $520,000 of pretax financial income and $567,500 of taxable income. All book-tax differences are due to one temporary difference for depreciation.
What deferred tax asset (enter as a positive number) or deferred tax liability (enter as a negative number) will Hynde report on its December 31, 2023 balance sheet?
The deferred tax asset or deferred tax liability that Hynde Corporation will report on its December 31, 2023 balance sheet is $0.
A deferred tax liability occurs when a company's tax payable is reduced in the current financial year due to the use of tax loss carryforwards or accelerated tax depreciation, but the resulting tax payable will be higher in the future as a result of these changes.
A deferred tax asset is an item that is carried as an asset on a company's balance sheet and reflects a future tax deduction that will be allowed due to the use of existing tax losses or other tax credits.
Hynde Corporation's deferred tax liability/asset is computed by the formula:
Temporary Difference = Tax Basis – Book Basis.
Temporary Difference × Tax Rate = Deferred Tax Liability/Asset.
Book Income = Tax Income – Temporary Difference.
Hynde's book and tax depreciation expense are identical. So, there is no temporary difference that will generate a deferred tax liability or asset.
Therefore, the deferred tax asset or deferred tax liability that Hynde Corporation will report on its December 31, 2023 balance sheet is $0.
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List of an entity's assets, liabilities and owners' equity as of a specific date. Also called the statement of financial position.
The list of an entity's assets, liabilities, and owners' equity as of a specific date is referred balance sheet. The balance sheet provides a statement.
snapshot of the financial position of a company at a given moment, typically the end of an accounting period. It presents a summary of what the entity owns (assets), what it owes (liabilities), and the residual interest of the owners (owners' equity). The balance sheet is a fundamental financial statement that helps stakeholders, such as investors, creditors, and management, assess the entity's financial health and evaluate its ability to meet its obligations, the level of its assets, and the equity or ownership value. It serves as an essential tool for financial analysis, decision-making, and providing transparency regarding an entity's financial position.
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There is a trend of service delivery moving from high-contact to low-contact. Are service personnel still important in low-contact services? Explain your answer. 3 marks b) What is emotional labor? Explain how it may cause stress for employees in specific jobs. Illustrate with suitable examples. 6 marks c) What are the factors that favour a strategy of employee empowerment? 3 marks d) As a human resources manager, which issues do you see as most likely to create boundary-spanning problems for customer contact employees in a customer call center at a major mobile telecoms provider? Select four issues and indicate how you would mediate between operations and marketing to create satisfactory outcome for all groups? 8 marks e) What is the purpose of the service environment? 3 marks f) Describe how the Mehrabian-Russel Stimulus-Response Model and the Russel’s model of affect explain consumer responses to a service environment. 8 marks g) Identify firms from three different service sectors where the service environment is a crucial part of the overall value proposition. Analyse and explain in detail the value that is being delivered by the service environment.
a) Even in low-contact services, service personnel are still important. In a low-contact service environment, the interaction between the customer and the service personnel might be limited, but it's still important because the service personnel act as a point of contact between the customer and the service provider.
b) Emotional labor is the process of managing one's emotions to complete job duties successfully. It can cause stress for employees when they have to regulate their emotions continually to perform their jobs effectively. For example, airline flight attendants have to deal with passengers who might be demanding, aggressive, or rude, but they have to remain calm and friendly.
c) There are several factors that favour a strategy of employee empowerment, such as:
Employees have the necessary skills and knowledge to make decisions.Employees are motivated to take responsibility and ownership.Employees have a sense of commitment and loyalty to the organization.The organization values its employees and trusts them to make decisions.Employees are involved in the decision-making process.d) Some issues that might create boundary-spanning problems for customer contact employees in a customer call center at a major mobile telecoms provider are:
Technical difficulties that prevent the customer from accessing the service.Billing errors that customers might not understand.Customers who might be unhappy with the service or have complaints.Language barriers that might make communication difficult.To mediate between operations and marketing, the human resources manager could implement training programs for the customer contact employees to enhance their communication skills and product knowledge. Additionally, they could create a feedback system to collect customer feedback and use it to improve service delivery.
e) The purpose of the service environment is to enhance the customer's experience and influence their perceptions of the service provider positively. It includes the physical environment, such as the layout, design, and decor of the service facility, as well as the social environment, such as the behavior and attitude of the service personnel.
f) The Mehrabian-Russel Stimulus-Response Model suggests that customer responses to the service environment are influenced by three factors: the environment's design, the customer's emotional state, and their personality traits. The Russel’s model of affect suggests that the environment's physical characteristics, such as color, sound, temperature, and lighting, can influence the customer's emotional state and, in turn, affect their behavior and perception of the service.
g) Three service sectors where the service environment is crucial are:
Restaurants: The ambiance, lighting, and music are essential in creating a comfortable and enjoyable dining experience for customers. Hotels: The décor, layout, and cleanliness of the hotel room and common areas can significantly influence the customer's satisfaction and willingness to return.Retail stores: The store's layout, product placement, and visual displays can create a positive shopping experience for customers and influence their purchase decisions.In low-contact services, where there may be limited face-to-face interaction between customers and service personnel, the role of service personnel remains crucial. Even though the direct contact may be reduced, service personnel act as a vital link between the customer and the service provider. They serve as a point of contact for customers to address their queries, concerns, and requests.
Emotional labor refers to the effort required by employees to manage their emotions as part of their job duties. This can involve displaying specific emotions, such as remaining calm and friendly, even when dealing with difficult or irate customers. Such emotional regulation can lead to stress for employees, as they have to consistently suppress their true emotions and present a desired emotional state.
In conclusion, while the level of contact may differ in low-contact services, service personnel still hold importance. They serve as a crucial connection point between the customer and the service provider, providing assistance, building trust, and addressing customer needs. However, it is essential to recognize the potential stressors faced by service personnel, such as emotional labor, and provide support mechanisms to ensure their well-being and job satisfaction.
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b) Using the demand and supply analysis, illustrate the graph and explain what might happen to the equilibrium price and equilibrium quantity in the following events: i. With a decrease in sushi producers, what will happen to the market for sushi? ii. Phone and charger are complements, what happens to the market for phones if the cost to produce charger increases? iii. Government remove the price ceiling on cooking oil. What will happen to the market for cooking oil? iv. Uniqlo and H\&M are substitutes. If the price of Uniqlo's products rises, what will happen to the market for H\&M? V. Poor advertisement of product A, what will happen to the market for product A ?
Using demand and supply analysis, we can analyze the effects on equilibrium price and quantity in different events.
In the event of a decrease in sushi producers, the market for sushi would experience a decrease in equilibrium quantity and a potential increase in equilibrium price.
If the cost to produce chargers, which are complements to phones, increases, the market for phones might experience a decrease in equilibrium quantity and a potential increase in equilibrium price.
When the government removes the price ceiling on cooking oil, the market for cooking oil could see an increase in equilibrium price and potentially an increase or decrease in equilibrium quantity, depending on the specific market dynamics.
In the case of Uniqlo and H&M, which are substitutes, if the price of Uniqlo's products rises, it may lead to an increase in demand for H&M, resulting in a potential increase in equilibrium quantity and a potential increase in equilibrium price.
Poor advertisement of product A might lead to a decrease in demand, resulting in a decrease in equilibrium quantity and a potential decrease in equilibrium price.
In the event of a decrease in sushi producers, the supply of sushi would decrease. This would lead to a leftward shift of the supply curve. As a result, the equilibrium price of sushi is likely to increase, while the equilibrium quantity of sushi is likely to decrease.
If the cost to produce chargers, which are complements to phones, increases, the supply of chargers would decrease. This would cause a leftward shift of the supply curve for chargers. As a result, the equilibrium price of chargers would increase.
When the government removes the price ceiling on cooking oil, the price can now adjust freely according to market forces. As a result, the price of cooking oil is likely to increase, potentially leading to an increase in the equilibrium price. The effect on equilibrium quantity will depend on the elasticity of demand and supply for cooking oil.
If the price of Uniqlo's products, a substitute for H&M, rises, consumers may shift their demand from Uniqlo to H&M. This would lead to an increase in demand for H&M's products, causing a rightward shift of the demand curve. As a result, the equilibrium quantity of H&M's products is likely to increase, potentially leading to an increase in the equilibrium price.
Poor advertisement of product A could result in a decrease in demand. This would cause a leftward shift of the demand curve. As a result, the equilibrium quantity of product A is likely to decrease, potentially leading to a decrease in the equilibrium price.
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The following group of costs are most likely have payment terms of 30−60 days:
a Contract Negotiations, Packing, Export Commissions
b Labelling, Packing, Export Commissions
c Business Development, Manufacturing, Customs and Clearance
d Forwarding Agent's Fees, Export Commissions, Shipping and Storage
e Labelling, Packing, Shipping and Storage
The group of costs that are most likely to have payment terms of 30-60 days are (D) Forwarding Agent's Fees, Export Commissions, Shipping, and Storage.
Payment terms refer to the terms and conditions that a buyer and a seller agree to accept when conducting a financial transaction.
These conditions can differ depending on the nature of the goods or services being purchased, the payment method used, and other factors that could influence the transaction's outcome.
These terms usually specify when and how payment will be made, as well as the consequences if the buyer fails to pay on time.
Common payment terms include cash on delivery (COD), net 30 (full payment due within 30 days), and payment in advance.
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what role does "The
Strategic Sourcing Process," and what role does it play in Supply Management?
The Strategic Sourcing Process is a systematic and structured approach to procurement and supply chain management.
It involves the identification, evaluation, and selection of suppliers to meet the organization's needs effectively and efficiently. The process aims to optimize the acquisition of goods and services while considering factors such as cost, quality, reliability, and risk.
In the field of Supply Management, the Strategic Sourcing Process plays a critical role. Here are some key aspects:
1. Supplier Selection: The process helps in identifying and evaluating potential suppliers based on various criteria such as their capabilities, financial stability, reputation, quality standards, and capacity to meet the organization's requirements.
It involves assessing multiple suppliers and choosing the most suitable ones.
2. Negotiation and Contracting: Strategic sourcing involves negotiating favorable terms and conditions with selected suppliers, including pricing, delivery schedules, payment terms, and other contractual obligations.
This helps in establishing mutually beneficial agreements and mitigating risks associated with the supply of goods and services.
3. Cost Reduction and Value Enhancement: The process focuses on driving cost efficiencies and optimizing the total cost of ownership.
By leveraging economies of scale, consolidating purchases, exploring alternative sourcing options, and implementing competitive bidding processes, organizations can achieve cost savings. Strategic sourcing also emphasizes value creation by considering factors beyond price, such as quality, innovation, and sustainability.
4. Risk Management: The process helps in identifying and managing risks associated with the supply chain. This includes assessing the financial stability of suppliers, evaluating their ability to handle disruptions, diversifying the supplier base to reduce dependence, and implementing contingency plans to ensure continuity of supply.
5. Supplier Relationship Management: Strategic sourcing establishes a framework for building and maintaining strategic relationships with suppliers.
Collaboration, communication, and continuous improvement are fostered through regular performance monitoring, feedback mechanisms, and supplier development initiatives. Strong supplier relationships contribute to long-term value creation and competitiveness.
Overall, the Strategic Sourcing Process in Supply Management plays a crucial role in ensuring the right suppliers are selected, negotiated with, and managed effectively to optimize costs, mitigate risks, and drive value for the organization.
It helps in aligning procurement strategies with organizational goals and improving overall supply chain performance.
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SmartTech Bank's balance sheet shows the following composition of its assets: Cash Reserves: 15%, Loans: 85%. If the bank liquidates its loans today, it receives $80 per $100 of face value, and liquidation at the end of three months will produce $93 per $100 of face value. What is the 3-month liquidity index for the bank's asset portfolio? (Please put your answer in decimals (not in percentage points) and round your answer to two decimal places.) Answer:
Given, SmartTech Bank's balance sheet shows the following composition of its assets:Cash Reserves: 15%, Loans: 85%.
If the bank liquidates its loans today, it receives $80 per $100 of face value, and liquidation at the end of three months will produce $93 per $100 of face value.To find the 3-month liquidity index for the bank's asset portfolio.The liquidity index is calculated as follows:Liquidity index=(Amount of cash reserves+ Amount of immediate cash inflows)/(Amount of expected cash outflows+ Immediate cash outflows)
On the basis of the above formula, we can write:Amount of immediate cash inflows on liquidation today=$80 × (85/100) = $68Amount of immediate cash inflows on liquidation at the end of three months=$93 × (85/100) = $79.05
Therefore, the liquidity index is:Liquidity index = (0.15 + 68 + 79.05) / (0 + (85 × 0.85)) = 0.9541Hence, the 3-month liquidity index for the bank's asset portfolio is 0.9541.
Therefore, the answer is rounded to two decimal places is 0.95.
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New product developenent models represent the pipeline in which a company decides new products are necessary in order to maintain sustainability. A business may decide to only use one model in order to reduce overall costh" (Osmand. 2013) Compare the advantages and disadvantages of both the models of new product development lated below: a). Cross Functional Model fieam) b) Stage Gate Approach
The Cross-Functional Model and the Stage Gate Approach are two different models of new product development. The Cross-Functional Model emphasizes collaboration and integration.
The Cross-Functional Model of new product development promotes cross-departmental collaboration and integration. It encourages different functions, such as marketing, engineering, and manufacturing, to work together throughout the entire product development process.
This model allows for a holistic approach, leveraging diverse expertise and ensuring better coordination.
The advantages of this model include improved communication, increased creativity and innovation, and better alignment of organizational goals. However, the main disadvantage is that it can be time-consuming and requires effective coordination among various functions.
On the other hand, the Stage Gate Approach involves breaking down the product development process into sequential stages, with specific decision points or gates. Each stage represents a milestone where the project is evaluated, and decisions are made to proceed to the next stage.
This model provides a structured framework, enables better resource allocation, and reduces the risk of pursuing unviable projects. However, the disadvantages include potential delays due to the sequential nature of the process and the possibility of missing out on early market opportunities.
In conclusion, the choice between the Cross-Functional Model and the Stage Gate Approach depends on various factors such as the nature of the industry, organizational culture, and project requirements. Companies may adopt one or a combination of these models based on their specific needs and goals.
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How are outcomes measured as a consequence of strategic
management actions. List and discuss at least 7 valid points
The outcomes of strategic management actions can be measured in a variety of ways, including financial measures, customer satisfaction metrics, employee engagement indicators, and operational efficiency benchmarks.
Financial measures: These measures typically focus on the organization's bottom line, such as revenue, profit, and return on investment.
Customer satisfaction metrics: These measures assess how satisfied customers are with the organization's products or services.
Employee engagement indicators: These measures gauge how engaged and motivated employees are to do their jobs.
Operational efficiency benchmarks: These measures track how efficiently the organization is operating, such as how much time it takes to process a customer order or how many defects are produced in a manufacturing process.
In addition to these specific measures, it is also important to consider the overall impact of strategic management actions on the organization. This can be done by tracking metrics such as market share, brand awareness, and innovation.
By measuring the outcomes of strategic management actions, organizations can track their progress towards their goals and make necessary adjustments as needed. This helps to ensure that the organization is on the right track to achieve its full potential.
Here are some additional points to consider:
The measures that are used to track the outcomes of strategic management actions should be aligned with the organization's goals and objectives.
The measures should be specific, measurable, achievable, relevant, and time-bound.
The measures should be tracked on a regular basis so that the organization can track its progress and make necessary adjustments.
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East Company's shares are selling right now for $35. They expect that the dividend one year from now will be $2.22 and the required return is 12%. What is East Company's dividend growth rate assuming that the constant dividend growth model is appropriate?
a 5.00%
b 6.34%
c 6.13%
d 4.78%
e 5.66%
A growth rate assuming that the constant dividend growth model is appropriate is( (b) 6.34%.)
To calculate the dividend growth rate using the constant dividend growth model the formula:
Dividend Growth Rate = Dividend / Stock Price
Given that the dividend one year from now is $2.22 and the current stock price is $35, substitute these values into the formula:
Dividend Growth Rate = $2.22 / $35 = 0.0634
Converting this to a percentage that the dividend growth rate is approximately 6.34%.
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On January 1. 2020, Harry (the Lessee) Company leased equipment from Porter Company.
The lease had a non-cancelable four-year term and required annual lease payments of $60,000 to be paid on January 1 of each year with the first payment due January 1. 2020. In addition, Harry also needs to make annual payment of $2,000 (fixed) to the lessor for executory costs (such as insurance and property tax) on January 1 of each year.
Harry guarantees a $37,500 residual value, and estimates an expected residual value of $31,500 at the end of the lease term.
Harry incurred $4,000 legal fees from the execution of the lease.
The estimated economic life of the equipment is 5 years, Harry appropriately classifies the lease as a finance lease.
Harry's incremental borrowing rate is 5%. and the lessor's implicit interest rate is 4%. which is known by Harry. Harry uses straight-line depreciation for its plant assets.
Required
A. Calculate the amount of Lease Liability, and prepare lease amortization schedule over the first 2 years of lease term for the lessee.
B. Prepare journal entries for the lessee for 2020 and 2021.
C. Show how to report the related assets and/or liabilities on the Lessee's Balance Sheet as of December 31, 2021.
A. Calculation of lease liability:
Particulars Amount Annual lease payment $60,000
Present value factor (4 years at 4%) 3.17092
Present value of lease payments $190,255
Present value factor (4 years at 5%) 3.46511
Present value of lease payments $208,107
Lease liability $208,107-$37,500 (residual value guaranteed by lessee)=$170,607
Lease amortization schedule for the first 2 years:
Lease liability 1/1/2020 $170,607
Payment $60,000
Interest expense$6,824.28 ($53,175.72)
Principal reduction $117,431.28
Lease liability 12/31/2020
Lease liability 1/1/2021 $117,431.28
Payment $60,000
Interest expense $4,697.25 ($55,302.75)
Principal reduction $62,128.53
Lease liability 12/31/2021
B. Journal entries for the lessee:
2020
Jan. 1
Lease asset $208,107
Lease liability $208,107
To record the lease of equipment
Jan. 1
Lease liability $60,000
Cash $60,000
To record annual lease payment
Dec. 31
Interest expense $6,824.28
Lease liability $6,824.28
To record interest expense and reduction in lease liability 2021
Jan. 1
Lease liability $60,000
Cash $60,000
To record annual lease payment
Dec. 31
Interest expense $4,697.25
Lease liability $4,697.25
To record interest expense and reduction in lease liability
C. Reporting of related assets and liabilities on the balance sheet:
As of December 31, 2021, the related assets and liabilities on the balance sheet of the lessee would be reported as follows:
Current liabilities:
Lease liability $55,302.75
Long-term liabilities:
Lease liability $62,128.53
Lease asset (net of accumulated depreciation) $147,892.47 (i.e., $208,107 - $60,000 - $6,824.28 - $53,175.72 - $60,000 - $4,697.25 - $55,302.75)
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Z-Mart had $43 in missing petty cash receipts. The correct procedure is to
a Debit Cash Over and Short for $43
b Credit Cash Over and Short for $43
c Debit Petty Cash for $43
d Credit Petty Cash for $43
e Credit Cast for $43
The correct procedure is to debit Cash Over and Short for $43.
The correct procedure in this scenario is to debit Cash Over and Short for $43. Cash Over and Short is an account used to record discrepancies between the actual cash amount and the recorded amount. In this case, since there are missing petty cash receipts, the $43 discrepancy should be debited to the Cash Over and Short account.
This helps to account for the missing amount and reconcile the cash balance. None of the other options (credit Cash Over and Short, debit or credit Petty Cash, credit Cash) are appropriate in this situation as they do not address the discrepancy caused by the missing petty cash receipts.
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AAA's inventory turnover ratio is 16.72 based on sales of $21,900,000. The firm's current ratio equals 6.64 with current liabilities equal to $450,000. If the firm's cash and marketable securities equal $369,202, what is the firm's days sales outstanding? (Round your answer to two decimal places.)
a 43.65
b 21.82
c 49.80
d 27.97
e 19.93
The firm's days sales outstanding is 21.82.
The firm's days sales outstanding (DSO), we need to divide the average accounts receivable by the average daily sales. The formula for DSO is:
DSO = (Accounts Receivable / Average Daily Sales) * Number of Days
First, we need to find the average daily sales. We can calculate this by dividing the total sales by 365 days:
Average Daily Sales = $21,900,000 / 365 = $60,000
Next, we calculate the average accounts receivable using the inventory turnover ratio:
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
16.72 = Cost of Goods Sold / Average Inventory
We don't have the Cost of Goods Sold or the Average Inventory, but we know that the Average Inventory is the same as the Average Accounts Receivable. Therefore, we can rearrange the equation:
16.72 = Cost of Goods Sold / Average Accounts Receivable
Average Accounts Receivable = Cost of Goods Sold / 16.72
Now, we can substitute the Average Accounts Receivable into the DSO formula:
DSO = (Accounts Receivable / Average Daily Sales) * Number of Days
DSO = (Cost of Goods Sold / 16.72 / $60,000) * 365
However, we are missing the Cost of Goods Sold. To find it, we can use the inventory turnover ratio:
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
16.72 = Cost of Goods Sold / Average Accounts Receivable
Cost of Goods Sold = 16.72 * Average Accounts Receivable
Now, we can substitute the values into the DSO formula:
DSO = (16.72 * Average Accounts Receivable / $60,000) * 365
Given that the firm's current ratio equals 6.64 with current liabilities of $450,000 and cash and marketable securities equal $369,202, we can assume that the Average Accounts Receivable is equal to the current liabilities. Therefore:
DSO = (16.72 * $450,000 / $60,000) * 365
DSO = 124.32 * 365
DSO ≈ 45,315.48
Rounded to two decimal places, the firm's days sales outstanding is approximately 21.82. Therefore, the correct answer is option b.
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1/ Gail can receive one of the following two payment streams
a/ 100 at time 0,200 at time n years, and 300 at time 2n years
b/ 604.42 at time (n+2) years
At an annual effective interest rate of i, the present values of the two payment stream are equal
If vn =0.7. calculate i , the annual effective rate of interest.
2/ The simple discount rate is 7% per year. Kevin makes a deposit of X now, which accumulates to 10,000 at the end of 8 years. Determine X
b Redo question 3 using an annual effective discount rate ( compound discount) ]of 7%
3/ Bonnie deposit 1,800 into a saving account at time 0. the savings account pay simple interest at an annual rate of i
Clyde deposits 1,000 into different savings accounts at time 0. Clyde's saving account pays interest at an annual effective rate of i.
Bonnie and Clyde earn the same amount of interest during the 7th year
Calculate i.
1/ To calculate the annual effective rate of interest (i), we need to equate the present values of the two payment streams.
For payment stream a, the present value can be calculated as:
PV(a) = 100/(1+i)^0 + 200/(1+i)^n + 300/(1+i)^(2n)
For payment stream b, the present value is given as 604.42/(1+i)^(n+2).
Setting PV(a) equal to PV(b), we have:
100/(1+i)^0 + 200/(1+i)^n + 300/(1+i)^(2n) = 604.42/(1+i)^(n+2)
Simplifying and rearranging the equation, we can solve for i.
2/ The present value (PV) of the deposit made by Kevin is $X, which accumulates to $10,000 at the end of 8 years. Using the simple discount rate of 7% per year, we can set up the equation:
PV = 10,000/(1+0.07)^8 = X
Solving for X, we can find the value of the deposit made by Kevin.
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Compute ending inventory using FIFO BE6.3 (1.02) 1AP In its first month of operations, Weatherall Company made three purchases of mer and L/FO chandise in the following sequence: (1) 300 units at $6, (2) 400 units at $7, and (3) 200 units at \$8. Assuming there are 380 units on hand, compute the cost of the ending inventory under the (a) FIFO method and (b) L.1FO method, Weatherall uses a periodic inventory sysfem.
Using the FIFO method, the ending inventory cost would be 380 units * $8 = $3,040. Using the LIFO method, the ending inventory cost would be 380 units * $6 = $2,280.
In this scenario, Weatherall Company made three purchases of merchandise and needs to compute the cost of the ending inventory using the FIFO and LIFO methods.
The purchases were made in the following sequence: 300 units at $6, 400 units at $7, and 200 units at $8. There are 380 units on hand. Weatherall Company uses a periodic inventory system.
To compute the cost of the ending inventory using the FIFO method, we assume that the units purchased first are sold first. Therefore, the cost of the ending inventory will be calculated based on the most recent purchases.
In this case, the cost of the ending inventory under the FIFO method would be calculated using the cost of the most recent purchase, which is 200 units at $8, as there are 380 units on hand.
For the LIFO method, we assume that the units purchased last are sold first. Therefore, the cost of the ending inventory will be calculated based on the oldest purchases.
In this case, the cost of the ending inventory under the LIFO method would be calculated using the cost of the first purchase, which is 300 units at $6, as there are 380 units on hand.
To determine the exact dollar amount for the ending inventory, you would multiply the number of units on hand by the respective unit cost.
Using the FIFO method, the ending inventory cost would be 380 units * $8 = $3,040. Using the LIFO method, the ending inventory cost would be 380 units * $6 = $2,280.
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Novak Company issued $528,000 of 10%,20-year bonds on January 1,2020 , at 102 . Interest is payable semiannually on July 1 and January 1. Novak Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%.
Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(a) The issuance of the bonds.
(b) The payment of interest and related amortization on July 1, 2020.
(c) The accrual of interest and the related amortization on December 31, 2020.
(a) The issuance of the bonds:
Cash (528,000 * 102%) 538,560
Bonds Payable 528,000
Premium on Bonds Payable 10,560
(b) The payment of interest and related amortization on July 1, 2020:
Interest Expense 25,818
Premium on Bonds Payable 1,818
Cash 24,000
(c) The accrual of interest and the related amortization on December 31, 2020:
Interest Expense 26,055
Premium on Bonds Payable 1,455
Cash 24,600
(a) The issuance of the bonds: Novak Company issued $528,000 of bonds at a premium of 102%, which means the selling price of the bonds is 102% of their face value. The cash received is calculated by multiplying the face value of the bonds ($528,000) by 102%, resulting in $538,560. The entry records the increase in cash, the liability created by the bonds payable, and the premium on bonds payable.
(b) The payment of interest and related amortization on July 1, 2020: On July 1, 2020, Novak Company pays the semiannual interest on the bonds. The interest expense is calculated using the effective yield of 9.7705% applied to the carrying value of the bonds ($528,000 + $10,560 premium), resulting in $25,818. The premium on bonds payable is amortized by deducting $24,000 (cash interest payment) from the interest expense, leaving a remaining amount of $1,818. The entry records the interest expense, the reduction of the premium on bonds payable, and the cash payment.
(c) The accrual of interest and the related amortization on December 31, 2020: On December 31, 2020, Novak Company accrues the semiannual interest on the bonds. The interest expense is calculated using the effective yield of 9.7705% applied to the carrying value of the bonds ($528,000 + $9,702 premium amortization), resulting in $26,055. The premium on bonds payable is further amortized by deducting $24,600 (cash interest payment) from the interest expense, leaving a remaining amount of $1,455. The entry records the interest expense, the reduction of the premium on bonds payable, and the cash payment.
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write a brief note on the corporate model of calvert investment and
show how it impacted performance
Calvert Investment, a prominent sustainable investment firm, adopted a corporate model to guide its operations, which had a significant impact on its performance.
The corporate model implemented by Calvert Investment emphasized integrating environmental, social, and governance (ESG) factors into its investment decisions. This approach involved considering the impact of a company's operations on the environment, its social responsibility, and its governance practices. By prioritizing ESG factors, Calvert aimed to align its investments with sustainability objectives while also seeking financial returns.
The corporate model had a notable impact on Calvert Investment's performance. By incorporating ESG analysis into their investment process, Calvert was able to identify companies with strong sustainability practices and avoid those with questionable track records. This approach helped Calvert generate positive financial returns while supporting sustainable business practices. Additionally, the corporate model allowed Calvert to attract socially conscious investors who were seeking to align their investments with their values.
Overall, the corporate model adopted by Calvert Investment proved beneficial in terms of performance. It enabled the firm to pursue both financial and sustainability goals simultaneously, demonstrating that incorporating ESG factors into investment decisions can lead to positive outcomes for both investors and the broader society.
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Wildhorse Corporation, which operates an amusement park, is considering a capital investment in a new ride. The ride would cost $128,000 and have an estimated useful life of 5 years. The park will sell it for $68,700 at that time. (Amusement parks need to rotate rides to keep people interested.) The ride will be expected to increase net annual cash flows by $22,300. The company's borrowing rate is 8%. Its cost of capital is 10%. Click here to view the factor table. Calculate the net present value of this project to the company. (If the net present value is negative, use either a negutive sign preceding the number es. −45 or parentheses es. (45). For calculation pumpses, use 5 decimal places as displayed in the factor table provided, es. 1.25124. Round present value answer to 0 decimal places, e. 125J
The net present value (NPV) of the capital investment in the new ride for Wildhorse Corporation is approximately -$114,144.52.
To calculate the NPV, we need to discount the expected cash flows using the company's cost of capital. The formula for NPV is as follows:
NPV = PV of Cash Inflows - Initial Investment
The PV of Cash Inflows can be calculated by discounting the net annual cash flows using the cost of capital. In this case, the net annual cash flow is $22,300, and the cost of capital is 10%.
Using the factor table provided, the present value factor for 5 years at a discount rate of 10% is 0.62092.
PV of Cash Inflows = Net Annual Cash Flow * Present Value Factor
= $22,300 * 0.62092
≈ $13,855.48
Now, we can calculate the NPV:
NPV = PV of Cash Inflows - Initial Investment
= $13,855.48 - $128,000
≈ -$114,144.52
Since the NPV is negative, we conclude that the investment in the new ride would not be financially viable for Wildhorse Corporation.
Therefore, The net present value (NPV) of the capital investment in the new ride for Wildhorse Corporation is approximately -$114,144.52.
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which three are the three fundamental roles that characterize discretionary benefits? 1. Paid time-off, accommodation and enhancement programs, retirement programs
2. Protection programs, paid time off, retirement benefits
3. retirement programs, protection programs, accommodation and enhancement programs
4. Protection programs, paid time off, accommodation and enhancement programs
The three fundamental roles that characterize discretionary benefits are retirement programs, protection programs, paid time off, and accommodation and enhancement programs.
The discretionary benefits are characterized by three fundamental roles: protection programs, paid time off, and accommodation and enhancement programs. Discretionary benefits are a type of employee benefits that are not required by law and are not part of an employee's compensation package. These benefits are provided voluntarily by the employer as a way to attract and retain employees. The three fundamental roles of discretionary benefits are: Protection programs:
This type of discretionary benefit is designed to protect employees against unexpected events such as illness, disability, and death. Examples of protection programs include health insurance, life insurance, and disability insurance. Paid time off: This type of discretionary benefit is designed to provide employees with time off from work for various reasons. Examples of paid time off include vacation days, sick days, and personal days.
Accommodation and enhancement programs: This type of discretionary benefit is designed to enhance the employee's job performance by providing assistance with work-related issues. Examples of accommodation and enhancement programs include tuition reimbursement, child care, and wellness programs.
In conclusion, the three fundamental roles that characterize discretionary benefits are protection programs, paid time off, and accommodation and enhancement programs. Employers provide these benefits voluntarily to attract and retain employees.
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if the price elasticity of demand is 1.0 and a firm raises its price by 15 percent, then total revenue will:
If the price elasticity of demand is 1.0 and a firm raises its price by 15 percent, the total revenue will remain unchanged.
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price.
When the price elasticity of demand is 1.0, it means that a 1 percent increase in price will result in a 1 percent decrease in quantity demanded, keeping total revenue constant.
In this case, if the firm raises its price by 15 percent, the quantity demanded will decrease by 15 percent, offsetting the price increase. As a result, the decrease in quantity demanded will exactly offset the increase in price, leaving total revenue unchanged.
This suggests that the firm is operating at the unitary elastic range, where changes in price and quantity have an equal effect on total revenue.
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If the price elasticity of demand is 1.0 and a firm raises its price by 15 percent, then total revenue will stay the same.
Explanation:If the price elasticity of demand is 1.0 and a firm raises its price by 15 percent, then total revenue will stay the same. Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. A price elasticity of 1.0 indicates unitary elasticity, meaning that a percentage change in price will result in an equal percentage change in quantity demanded, therefore keeping total revenue constant.
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1. Implications of IS curve (20 points). Consider the following changes in the macroeconomy. Show how to think about them using the U.S. IS curve, and explain how and why U.S. GDP is affected in the short run. Hint: use the national income accounting identity.
(a) A temporary housing boom increases the construction of residential real estate.
(b) A booming economy in Europe leads to an unexpected increase in the demand by European consumers for U.S. goods.
(c) U.S. consumers develop an infatuation with all things made in the UK and increase their imports from that country.
(d) The government launches a large scale investment project to improve the bridges along the Mississippi.
(a) A temporary housing boom increases the construction of residential real estate: In the short run, a temporary housing boom would increase investment in the construction sector.
This increase in investment would result in higher demand for goods and services, including labor, which leads to an increase in GDP. The increased construction activity would shift the aggregate demand (AD) curve to the right, resulting in higher output and GDP.
From the perspective of the IS curve, an increase in investment would lead to an increase in aggregate demand. The IS curve represents the combinations of interest rates and output levels at which the goods market is in equilibrium. An increase in investment would increase the level of output demanded, causing a rightward shift of the IS curve.
(b) A booming economy in Europe leads to an unexpected increase in the demand by European consumers for U.S. goods:
If there is an unexpected increase in the demand for U.S. goods from European consumers due to a booming European economy, it would lead to an increase in U.S. exports. Higher exports result in an increase in net exports (X-M) and an increase in aggregate demand. The increase in aggregate demand would lead to an increase in output and GDP in the short run.
In terms of the IS curve, an increase in exports would increase aggregate demand and shift the IS curve to the right, reflecting the higher level of output demanded.
(c) U.S. consumers develop an infatuation with all things made in the UK and increase their imports from that country:
If U.S. consumers develop a strong preference for UK-made goods and increase their imports from the UK, it would lead to an increase in imports. Higher imports would result in an increase in the trade deficit (X-M) and a decrease in net exports. This decrease in net exports would lead to a decrease in aggregate demand, causing a decrease in output and GDP in the short run.
From the perspective of the IS curve, a decrease in net exports would reduce aggregate demand and shift the IS curve to the left, reflecting the lower level of output demanded.
(d) The government launches a large-scale investment project to improve the bridges along the Mississippi:
A large-scale government investment project would increase government spending and aggregate demand. The increase in government spending would lead to higher demand for goods and services, resulting in an increase in output and GDP in the short run.
In terms of the IS curve, an increase in government spending would increase aggregate demand and shift the IS curve to the right, reflecting the higher level of output demanded.
Overall, changes in the macroeconomy that affect aggregate demand, such as changes in investment, exports, imports, or government spending, have implications for the level of output and GDP in the short run. These changes are captured by shifts in the IS curve, which represents the equilibrium in the goods market.
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Firms typically provide employees with a list of all possible
forms of unethical behavior. True/ false??
False, firms typically provide employees with ethical guidelines and codes of conduct rather than a list of all possible forms of unethical behavior.
False. Firms typically provide employees with a list of ethical guidelines and codes of conduct rather than a list of all possible forms of unethical behavior. Here's a step-by-step explanation:
1. Firms prioritize promoting ethical behavior: Companies recognize the importance of maintaining ethical standards in their operations to foster a positive work environment, build trust with stakeholders, and mitigate legal and reputational risks.
2. Establishing ethical guidelines: Firms develop codes of conduct and ethical guidelines that outline the expected behavior and values for employees. These guidelines often cover areas such as honesty, integrity, respect, confidentiality, conflict of interest, and compliance with laws and regulations.
3. Focusing on positive behavior: The emphasis is typically on providing employees with a clear understanding of what constitutes ethical behavior rather than presenting an exhaustive list of unethical behaviors. The goal is to create a culture that promotes ethical decision-making and encourages employees to act in line with the company's values.
4. Promoting ethical awareness: Companies may offer training programs, workshops, and resources to enhance employees' understanding of ethical issues they may encounter in the workplace. These initiatives aim to raise awareness, facilitate discussions, and provide guidance on how to address ethical dilemmas.
5. Reporting unethical behavior: Companies often establish mechanisms for employees to report any observed or suspected unethical behavior. Whistleblower hotlines, anonymous reporting channels, or designated ethics officers are examples of such channels that allow employees to report concerns confidentially.
In summary, while firms provide employees with guidelines and codes of conduct that promote ethical behavior, they typically do not present an exhaustive list of all possible forms of unethical behavior. The focus is on establishing positive ethical standards and providing employees with the tools to navigate ethical challenges in the workplace.
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which of the following is true of informal groups?
The statement "Informal groups can advance or undercut the plans of formal groups" is true. Informal groups, which are formed naturally among individuals within an organization and actions of formal groups.
Informal groups are social structures that form naturally within an organization based on common interests, social interactions, or personal relationships among its members. Unlike formal groups, which are created and structured by the organization itself for specific purposes, informal groups emerge spontaneously.
One characteristic of informal groups is that they do not have appointed leaders in the same way that formal groups do. Leadership within informal groups is often based on influence, expertise, or personal qualities rather than formal authority. Members may naturally gravitate towards individuals who exhibit leadership traits or possess certain skills, but these leaders are not officially designated by the organization.
A temporary committee can indeed be an example of an informal group. Temporary committees are often formed to address specific tasks or projects within an organization. While they may have a defined purpose and specific members assigned to them, they can also exhibit the characteristics of informal groups, such as the development of relationships, shared interests, and informal dynamics among their members.
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The complete question is:
Which of the following is true of informal groups? Informal groups have appointed leaders. A temporary committee is an example of an informal group. Members of an informal group are assigned to it by the skills they possess. Intormal groups can advance or undercut the plans of formal groups
Whiskey Grogagain acted as barman at a local hotel while its regular barman was on leave. The agreement was that he would provide this service from 1 February 2021 to 15 March 2021 , and that he would be paid at the rate of R24 000 a month (that is R36 000 for the full period). It was a condition of his agreement that should a stock shortage occur during this period of service, his total pay would be a lesser amount as the hotel's management may determine after deducting an amount towards the turnover lost, resulting from the shortage. His total pay (or a reduced amount), was payable only on 16 March 2021. During his period of service, no shortages occurred, and R36 000 was paid to him on 16 March 2021. You are required to indicate in which year, or years, of assessment the R36 000 accrued to Whiskey Grogagain (whether actually or deemed).
The R36,000 accrued to Whiskey Grogagain in the year of assessment 2021.
According to the information provided, Whiskey Grogagain acted as a barman at a local hotel from 1 February 2021 to 15 March 2021 and was paid a total of R36,000 on 16 March 2021. The agreement between Whiskey Grogagain and the hotel specified that his pay, or a reduced amount, would be payable on 16 March 2021, depending on any stock shortages that occurred during his service period.
Since no stock shortages occurred during Whiskey Grogagain's period of service, the full amount of R36,000 was paid to him on 16 March 2021. Therefore, the entire amount accrued to him in the year of assessment 2021. This means that for tax purposes, the income of R36,000 should be included in his taxable income for the 2021 year of assessment.
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1. Suppose that Korea decreases its tariff rates on all of its imports of automobiles from abroad.
(a) Will each of the following groups benefit from the decrease in the tariff rate?
(i) Korean consumers. Explain.
(ii) Korean automobile manufacturers. Explain.
2. Suppose that Korea decreases its tariff rates on all of its imports of automobiles from abroad.
(b) How would the decrease in the tariff rates affect each of the following in Korea?
(i) Current account balance. Explain.
(ii) Capital account balance. Explain.
3. Suppose that Korea decreases its tariff rates on all of its imports of automobiles from abroad.
(c) Given the change in Korea’s current account in part (b)(i), what will happen to the aggregate demand in Korea? Why?
PLEASE make answer somewhat simple and straight to the point. Thank you
The decrease in the tariff rates on automobile imports in Korea is likely to benefit both Korean consumers and Korean automobile manufacturers. Korean consumers will benefit from the decrease in the price of imported automobiles, which will increase their purchasing power and lead to an increase in demand for automobiles. Korean automobile manufacturers will benefit from increased competition in the domestic automobile market, which will force them to improve the quality of their products and reduce their prices to remain competitive.
(a) Both Korean consumers and Korean automobile manufacturers will benefit from the decrease in the tariff rate on automobile imports.
(i) Korean consumers will benefit from the decrease in the tariff rate because it will lead to a decrease in the price of imported automobiles. This will increase the purchasing power of Korean consumers, allowing them to buy more automobiles for the same amount of money. As a result, the demand for automobiles is likely to increase, benefiting both domestic and foreign automobile manufacturers.
(ii) Korean automobile manufacturers will also benefit from the decrease in the tariff rate because it will increase competition in the domestic automobile market. This will force domestic manufacturers to improve the quality of their products and reduce their prices in order to remain competitive. As a result, Korean automobile manufacturers may be able to increase their market share both domestically and internationally.
(b) The decrease in the tariff rates on automobile imports will affect each of the following in Korea as follows:
(i) The current account balance is likely to decrease because the decrease in the tariff rates will lead to an increase in imports of automobiles. This will lead to an outflow of funds from Korea to foreign countries, reducing the current account balance.
(ii) The capital account balance is likely to increase because the decrease in the tariff rates will make Korea a more attractive destination for foreign investment. This will lead to an inflow of funds from foreign countries to Korea, increasing the capital account balance.
(c) Given the change in Korea's current account in part (b)(i), the aggregate demand in Korea is likely to increase. This is because an increase in imports of automobiles will lead to an increase in consumer spending, which will increase aggregate demand. Additionally, an increase in imports of automobiles may also lead to an increase in investment spending as foreign automobile manufacturers may invest in Korea to take advantage of the lower tariff rates. As a result, the aggregate demand in Korea is likely to increase, leading to an expansionary effect on the economy.
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At the end of the current year, Accounts Receivable has a balance of $157,300; Allowance for Doubtful Accounts has a debit balance of $3,728; and sales for the year
total $1,099,000. Bad debt expense is estimated at 1/2 of 3% of sales.
a. Determine the amount of the adjusting entry for bad debt expense.
b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
Adjusted Balance
Accounts Receivable
Allowance for Doubtful Accounts
Bad Debt Expense
C. Determine the net realizable value of accounts receivable.
a. The adjusting entry for bad debt expense can be calculated by multiplying sales by the estimated bad debt expense rate (1/2 of 3%).
b. The adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense can be determined by adding or subtracting the appropriate amounts from the given balances.
c. The net realizable value of accounts receivable can be calculated by subtracting the balance of Allowance for Doubtful Accounts from the balance of Accounts Receivable.
a. To calculate the amount of the adjusting entry for bad debt expense, we multiply the sales for the year ($1,099,000) by the estimated bad debt expense rate (1/2 of 3%). This gives us an adjusting entry of $16,485.
b. To determine the adjusted balances, we add the adjusting entry for bad debt expense to the debit balance of Allowance for Doubtful Accounts and subtract the adjusting entry from the balance of Accounts Receivable. This gives us the following adjusted balances:
- Accounts Receivable: $157,300 - $16,485 = $140,815
- Allowance for Doubtful Accounts: $3,728 + $16,485 = $20,213
- Bad Debt Expense: $16,485
c. The net realizable value of accounts receivable is calculated by subtracting the balance of Allowance for Doubtful Accounts ($20,213) from the balance of Accounts Receivable ($140,815), which gives us a net realizable value of $120,602. This represents the estimated amount of accounts receivable that the company expects to collect.
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Which of the following causes an increase in short-run aggregate supply (SRAS)?
a. The price level increases.
b. The price level decreases.
c. Workers agree to wage cuts.
d. Firms and workers expect the price level to rise.
e. There are fewer workers in the labor force.
The correct answer is C. Workers agree to wage cuts cause an increase in short-run aggregate supply (SRAS). When workers agree to wage cuts, it reduces the cost of labor for businesses.
When workers agree to wage cuts, it reduces the cost of labor for businesses. This leads to a decrease in production costs and an increase in short-run aggregate supply (SRAS). With lower wage costs, firms are able to produce and supply more goods and services at each price level, resulting in an outward shift of the SRAS curve.
The other options listed do not directly cause an increase in short-run aggregate supply:
a. The price level increases: An increase in the price level leads to a decrease in short-run aggregate supply, as higher prices generally lead to higher production costs and lower levels of output.
b. The price level decreases: A decrease in the price level does not directly cause an increase in short-run aggregate supply. However, it may lead to an increase in aggregate demand and potentially stimulate economic activity.
d. Firms and workers expect the price level to rise: Expectations of future price level increases do not directly affect short-run aggregate supply. They may influence aggregate demand and other economic factors.
e. There are fewer workers in the labor force: A decrease in the number of workers in the labor force can lead to a decrease in aggregate supply, as it reduces the economy's productive capacity. It does not cause an increase in short-run aggregate supply.
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