Answer:
$10,000
Explanation:
The computation of the amount should Foster record as an adjustment to its allowance for uncollectible accounts at year-end is shown below"
= $1,000,000 × 5% - $40,000
= $50,000 - $40,000
= $10,000
Hence, the amount that should be recorded is $10,000
Answer:
will be greater than the nominal interest rate.
Explanation:
Inflation can be defined as the persistent general rise in the price of goods and services in an economy at a specific period of time.
Generally, inflation usually causes the value of money to fall and as a result, it imposes more cost on an economy.
Deflation can be defined as a fall or decrease in the overall price level of goods and services in an economy, so that inflation becomes negative while causing an increase in the purchasing power of a currency. Thus, an economy experiences a deflation when its inflation rate becomes negative i.e falls below zero percent (0%).
Furthermore, if an economy experiences deflation, the real interest rate will be greater than the nominal interest rate due to a negative inflation.
Mathematically, deflation is given by the formula;
Real interest rate - Nominal interest rate = - Inflation
Answer:
a) 25,000
Explanation:
The computation of the economic profit is shown below;
Economic profit is
= Revenue - Explicit cost - Implicit cost
= $550,000 - $500,000 - $500,000 × 5%
= $550,000 - $500,000 - $25000
= $25,000
Hence, the economic profit on this deal was $25,000
Therefore the correct option is a.
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Answer: The fair market value of the free tour to Costa Rica is a taxable income.
Professor Vanessa Lazlo won the free tour in a draw, where a prize is awarded by chance.
Publication 525 of the IRS defines taxable and non taxable income.
The IRS lists winnings from raffles and lotteries under Other income.
It also declares that the fair market value of winnings from raffles and lotteries are winnings from gambling. Hence the fair market values of non cash prizes are taxable and must be included as income.
