The idea behind Nixon's decision to "freeze" wages and prices was inflation affects wages and prices, so freezing those would halt inflation.
When the total demand (AD) exceeds the total supply (AS) of a given item or service in the market, this is referred to as inflation.
As a result, the cost of those goods and services rises. This occurs as a result of people having money, either through high government spending or from high incomes or low loan rates.
Nixon thus decides to maintain a specific level of prices and salaries in order to freeze employment. As a result, the population's purchasing power will be constrained, and prices will eventually balance out.
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Answer:
The Journal entries are as follows:
(a) On February 1,
Allowance for doubtful accounts Dr. $8,800
To Account receivable-Oakley Co $1,900
To Account receivable-Brookes Co $6,900
(To record write off)
(b) On June 5,
(i)
Account receivable-Oakley Co. Dr. $1,900
To Allowance for doubtful accounts $1,900
(To record amount reinstated)
(ii)
Cash A/c Dr. $1,900
To Account receivable-Oakley CO $1,900
(To record cash received)
Answer:
Balance sheet:
Accounts Payable
-Liability
Property, Plant. and Equipment
-Asset
Long-Term Debt-Liability
Retained Earnings-equity account
Prepaid Expense
-Asset
Common Stock
-equity account
Accounts Receivable-Asset
Income statement:
Cost of Goods Sold-expense
Research and Development-expense
Explanation:
Property, plant and equipment , accounts receivable and prepaid expenses would appear on the asset side of the balance sheet.
Long-term debt and accounts payable are both liabilities since they are obligations owed to third parties while retained earnings and common stock are both equity account
Lastly,cost of goods sold and research and development cost are expenses in the income statement
Answer:
Asset
Balance Sheet
Expense
Income statement
Explanation:
An asset is defined as a property of company, from which future economic benefits will arise, as for inventory in hand, the inventory can be sold in future and then future benefits will arise from such sale. Thus, it is an asset and assets are reported in balance sheet.
The expenses are the cost associated to earn the revenue, as when any inventory is sold the inventory is recorded as an expense called cost of goods sold, which is recorded in income statement.
