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Bas_tet [7]
3 years ago
8

A company produces 100 cars in the year 2017 but only manages to sell 90 of the cars. In the year 2018 they sell the 10 cars tha

t were not sold in the previous year to consumers. In which spending categories of gdp do we record the 10 cars?
Business
1 answer:
forsale [732]3 years ago
7 0

Answer:

The question has below options:

A. The unsold cars count as inventory investment for 2017. 2018 GDP is not affected.

B.The unsold cars count as consumption spending in 2018.

C. The unsold cars count in the inventory investment category for both years and count as consumption spending in 2018.

Option B is the correct answer

Explanation:

The unsold stock of 10 cars in 2017 is classified as investment  since  the cost of producing them is expected to yield returns in 2018 when they have been sold.

However, the unsold stock of 2017 becomes 2018 consumption of GDP since it relates to household expenditure in 2018, as a result it is accorded such classification.

It cannot be classified as government expenditure as the government is not the one purchasing the vehicle

Also, the ten cars have nothing to do with import or export as they are trade within the domestic economy

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6 0
3 years ago
On December 31, after making a concerted effort, management determines that it will not be able to collect the $1,200 owed to it
OLga [1]

Answer:

See explanation below

Explanation:

The following will be selected in excel via the drop-down menus.

Dr; Account name = Bad debt expense/Dad debt written off $ 1200

Cr; Account name = Accounts Receivable $ 1200

The company uses the direct write-off method thus these will be the journal entries.

4 0
3 years ago
On October 1, Eder Fabrication borrowed $60 million and issued a nine-month promissory note. Interest was payable at maturity. I
7nadin3 [17]

Answer:

cash        55,110,929 debit

   note payable      55,110,929 credit

--to record singing of promissory note with discounted interest--

interest expense 1.583.741,77 debit

   note payable              1.583.741,77 credit

--to record accrued interest on note payable --

Explanation:

the note plus interest will be for 60 millions.

So to calcualte the isuance ofthe note we must calculate the present value of a lump sum at 12% discount rate:

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity  60,000,000.00

time   0.75

rate  0.12

\frac{60000000}{(1 + 0.12)^{0.75} } = PV  

PV   55,110,929.18

then at December 31th we solve for the accrued interest:

Principal \: (1+ r)^{time} = Amount

Principal 55,110,929.18

time 0.25 (3 months over 12 month a year)

rate 0.12000

55110929.18154 \: (1+ 0.12)^{0.25} = Amount

Amount 56,694,670.95

accrued interest: 56,694,670.95 - 55,110,929.18 = 1.583.741,77

8 0
3 years ago
Prior period adjustments to financial statements can result from: Multiple Choice Changes in estimates of salvage value. Materia
AveGali [126]

The answer is  material math error.

An adjusting entry is essentially a bookkeeping modification that improves the accuracy of the financial statements by reflecting the revenue and spending on an accrual basis, which is typically but not always the case. At the conclusion of the accounting period, adjustments are made. This might happen towards the end of the month or at the end of the year.

Prior period adjustments are errors or mistakes committed in the prior reporting period. These mistakes must be remedied or eliminated by taking suitable corrective action. Prior period items include factual errors, arithmetic errors, and errors in applying accounting rules.

Therefore, material math error is the correct option.

To know more about adjustment to financial statements click here:

brainly.com/question/24178504

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4 0
2 years ago
Give an example of a situation in which a surplus of a product led to decreased prices. similarity, give a example of a situatio
andrew11 [14]

Answer:

Give an example of a situation in which a surplus of a product led to decreased prices. similarity, give a example of a situation in which a shortage led to increased prices. what eventually happened in each case? why?

In the course of having surplus of a product which decreases the price, this happens as a result of high competition as there many people selling the same products which in turns leads to crash in price in order to make sales and little profit.

while product shortage or scarcity happens as a result of decrease in resources or decrease in supply, hence; results into scarcity of products which eventually aids increment of price

Explanation:

3 0
3 years ago
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