Question 1 Completion with Options:
A. used equipment
B. storage warehouse
C. land for future building site
D. new office furniture
E. apartment complex
F. new delivery truck
Answer:
1. The assets purchased in the current year that are eligible to be expensed under Section 179 assuming the cost does NOT exceed the limitations are:
A. used equipment
D. new office furniture
F. new delivery truck
2. $561,000 is the maximum to be expensed with an adjusted basis of 100% for MACRS
Explanation:
There is a maximum deduction of $1,050,000 under section 179. The section affords eligible taxpayers the opportunity to reduce their tax burden in the first year that they purchase eligible properties.
Hmm, i'm not super sure about this one can I go and research it?
Answer:
Given the supply of land is perfectly inelastic, the drop in prices must have resulted from decreased demand for land. The demand for land would fall if there were less of a return on the land (i.e., rent), so we can safely assume that land rent fell in Japan between 1990 and 2001. The shifts from D3 to D2 to D1 demonstrate graphically what happened in Japan.
Explanation:
Starting inventory + purchases - ending inventory = cost of goods sold.
Solution:
a) Deposits= Bank Reserves/ (Reserve-deposit ratio)
= $250 / 0.25 = $1,000
Money supply =Currency held by the public+ Deposits
= $200 + $1,000 = $1,200
b) The savings and currency of the country are equivalent in this case. Its worth should be equal to x and deposits should have money supply less currency.
r = reserves/total deposits
0.25 = x / ($600 - x)
x = 150 - 0.25x
1.25 x =150
x =120
So, the currency held by public is $120
Bank reserves are $120
c) As the money supply is $1,400 and the public holds $500 in currency, bank deposits must equal $900
If bank reserves are $90,
the desired reserve/deposit ratio equals $90/$900 = 0.1
