Answer:
Jan.2
Dr Cash 11,700
Cr Owner Equity 11,700
( to record owner's capital contribution to the business under the form of cash)
Jan.3
Dr Vehicles 3,510
Cr Cash 3,510
( to record the purchase of used car in cash)
Jan.9
Dr Supplies 585
Cr Account Payable 585
(to record supplies purchase on account)
Jan.11
Dr Account Receivable 2,808
Cr Revenue 2,808
( to record revenue earned in credit)
Jan.16
Dr Advertising expenses 410
Cr Cash 410
( to record advertising expenses paid in cash)
Jan.20
Dr Cash 819
Cr Account Receivable 819
( to record the partial collection of receivables)
Jan.23
Dr Account Payable 351
Cr Cash 351
( to record payment to creditor)
Jan.28
Dr Owner Equity 1,170
Cr Cash 1,170
(to record owner's withdraw of capital in form of cash)
Explanation:
Answer: a. Inflation
Explanation:
Inflation refers to the general rise in prices of items in an economy in a certain period of time. Inflation essentially erodes the value of the domestic currency of the economy in question.
Central Banks like the Fed can use Monetary policy to influence inflation. In this case they reduced the amount of money in the economy by reducing bank loans. This will ensure that people cannot spend too much which would increase demand and therefore increase prices.
By doing this, they have limited the likelihood of inflation.
Answer:
$202,500
Explanation:
Working capital is the difference between current assets and current liabilities. Therefore, the formula for calculating working capital is as below.
Working capital = current assets- current liabilities
in this case
current assets =
cash $200,000
account receivable $75,000
prepaid expenses of $12,500,
Total current assets = $287,500
current liabilities
accounts payable of $50,000
other current liabilities of $35,000
Total current liabilities = $85,000
working capital = $287,500 - $85,000
=$202,500
b. A Eurodollar is a U.S. dollar deposited in a bank outside the U.S.
c. The term Eurobond applies only to foreign bonds denominated in U.S. currency.
d. Any bond sold outside the country of the borrower is called an international bond.
e. Foreign bonds are bonds sold by a foreign borrower but denominated in the currency of the country in which the issue is sold.
Answer:
b. A Eurodollar is a U.S. dollar deposited in a bank outside the U.S.
Explanation:
A Eurodollar is a bond issued by a foreign company in US dollars instead of heir own domestic currency. Eurodollars are issued and redeemable at the foreign country, no the US. It has nothing to do with money deposited in banks outside of the US, since it refers to bonds, not deposits.
Answer:
Adjustying Entry at the end of January
Dr. Cr.
Supplies Expense Account $1,000
Supplies Inventory Account $1,000
Explanation:
Opening supplies = 0 (First month of operation)
Purchases on January 5 = $4,000
Supplies on January 31 = $3,000
Closing Inventory = Opening Inventory + Purchase during the month - Expense for the month
$3,000 = $0 + $4,000 - Expense for January
Expense for January = $4,000 - $3,000 = $1,000
b. the higher the required rate of return on an investment
c. the lower the maturity premium required by the investors
d. the higher the money supply in the economy
e. the lower the tax rate in the economy
Answer: b. the higher the required rate of return on an investment
Explanation: Inflation is an increase in the general level of prices or in the cost of living. It is the decline in the value of money and as such it erodes the purchasing power of future cash flows or investments. All things being equal, higher inflation rates (current or expected) equates to rising yields across the yield curve. As a result, investors demand this higher yield to account for the risk of inflation. This makes option b the only option that is true and accurate.
The higher the expected rate of inflation, the higher the required rate of return on an investment.
The correct answer is b. The higher the expected rate of inflation, the higher the required rate of return on an investment. When the expected rate of inflation is high, investors require a higher rate of return to compensate for the loss in purchasing power of their money. This is because high inflation erodes the value of money over time, reducing the real return on an investment. Therefore, investors demand a higher rate of return to maintain their purchasing power.
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Answer:
B) Will become flatter as output increases if there are diminishing returns to the variable input
Explanation: