1.d.exacerbate all of the problems caused by asymmetric information
2.d.it is concentrating the loan risks
Answer:
C. Build up inventories before reducing production.
Explanation:
Demand shocks happen when there is a sudden and considerable shift in the patterns of private spending, either in the form of consumer spending from consumers or investment spending from businesses. An economic downturn in the economy of a major export market can create a negative shock to business investment, particularly in export industries. A crash in stock or home prices can cause a negative demand shock as households react to a loss of wealth by cutting back sharply on consumption spending. Supply shocks to consumer commodities with price inelastic demand, such as food and energy, can also lead to a demand shock by reducing consumers real incomes. Economists sometimes refer to demand side shocks as "non-technological shocks." We need to build up inventories before reducing production.
Answer:
What she wants to know is whether she can deduct expenses related to her home office?
There are two basic requirements for claiming a home office deduction:
- Regular and exclusive use: this might qualify because her home office would be used only as an office and not as an additional room. This requirement is OK.
- Principal place of your business: she fails with this requirement since most of her work is done at her client's office. Since most of her work is done outside her home office, she cannot deduct expenses for it.
What is the estimated amount of the home office deduction?
There are two ways to deduct home office expenses if you qualify (in this case she doesn't):
- Simplified option: $5 per square foot (for a maximum of 300 sq ft) = $1,500
- Regular method: deductions are based on a % of the area used by the home office, in this case she could deduct approximately 10% of her home expenses (= 500 / 5,000) if she had qualified for the deduction.
Answer:
The numbers are missing in this question, but I will use make my own:
"In 1990, Johnson Company purchased a building for <u>$400,000</u>. In 2020, a real estate professional says the building has a fair value of <u>$950,000</u>."
The building must be reported at purchase cost (following the historical cost principle) and the only adjustment to its carrying value is accumulated depreciation. Fixed assets must always be reported at purchase cost and in this case would be $400,000.
