What happen during periods of hyperinfation?

List and explain ten factors to consider in preparing family income

aniked [119]

Answer:

1. Availability of Money:

The expenditure of a family depends upon the availability of money or total income of the family. It can afford to spend under various needs. In lower income group, families expenditure is more on food. Higher income group families spend more on recreation, education and luxuries etc.

2. The size and the composition of the family:

Expenditure depends upon the size and composition of the family. The size of the family means the number of adults and children. The more the mouths to eat the expenditure is more on food, clothing and shelter. With the growth of children, more will be spent on education and clothing. More will be spent towards transportation when the members go out of the house for work or study.

Composition of the family means the number of adults and children in the family. It also includes the number of males, females and old persons. For old persons, extra expenditure will be incurred towards health and medical expenses.

3. Stages of family life cycle:

Family life cycle plays an important role in spending money. At the beginning stage, most part of the family income is spent towards the establishment expenditure as a newly married couple starts their family life. In the expanding stage families need money for the children, their food, dress, education etc. Some families in the expanding stage spend more on purchasing durable household goods, furniture etc. In the contracting stage major expenditure is on wedding celebration of their children. During this stage, the family income is gradually reduced. So the expenditure should be cut short.

4. Occupation of the family members:

Sometimes expenditure of the family depends upon the occupation of the family members. In certain jobs, there are special benefits like free quarters, educational facilities for children, health and medical allowance, travelling allowance etc.

5. The needs and objectives of the family:

Expenditure will be done according to the needs and objectives of the family. For example, a family where young children are there, more will be spent for nutritious foods. Old people require health and medical expenses. Working women spend money for the servants as they do not find time to do the household work.

6. Resources:

Both human and material resources can make significant changes in the pattern of expenditure of a family. The abilities, skill, knowledge, interest, attitude and habits of the members of the family can be utilized for various purposes as supplementary income.

7. Locality of the family:

In rural areas more will be spent on food. But in urban areas the expenditure is more on education, recreation, transportation, accommodation etc.

8. Socio-economic status of the family:

The socio-economic status of the family is determined by its income, education level and occupation of the members. The higher the socio-economic status the expenditure will be more on interior decoration, higher education, club membership, accommodation, recreation etc. The total expenditure depends on the standard of living the family maintains.

9. Social and religious traditions:

Some families accept old and traditional values. So they spend more on marriages and religious festival.

10. Personal choice:

Expenditure depends upon the personal choice. For example, one person may have a liking for expensive perfumes and jewellery while another may have simple tastes. Expenditure is also affected by the measures taken in the family to make provision for the future like house building, higher education of children etc. The home-maker will be able to manage with her income by cutting out unnecessary and extravagant expenditure. “One must cut one’s coat according to his cloth.”

This saying is rightly proved in home management. Balancing of income and expenditure is the best way of money management. Whatever the income may be, the efficient management of money is a requisite for a happy, successful and peaceful family life.

8 0

3 years ago

When the economy is on the short-run aggregate supply curve and to the left of the long-run aggregate supply curve, actual aggre

Colt1911 [192]

Answer:

Nominal salaries decrease and the short term aggregate goes up to the right.

Explanation:

Companies normally make decisions about the amount of supplies in which they invest according to the profits that they expect to obtain in the future according to the variables of their economic activity. The profits for the company will be also determined by the price of the products or services the company trades and the price of the supplies necessary for such activities.

6 0

3 years ago

The main disadvantage of a monetary union is the loss of national monetary and exchange rate policy independence. lessened polit

anzhelika [568]

Answer:

The correct option is;

Loss of national monetary and exchange rate policy

Explanation:

The disadvantages of the establishment of monetary unions includes;

1) The loss of independence in monetary policy

2) The associated problems that arise due to the the initial establishment of the union

3) Tedious nature of the task of attaining comprehensive capital mobility

The advantages are;

1) Lack of uncertainty in exchange rate variation

2) Reduced cost of doing business

3) Improved fiscal stability as well as control of the inflation rate by supranational central bank.

7 0

3 years ago

During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2021,

Natasha2012 [34]

Answer:

adjusting entries:

a. An insurance policy covering three years was purchased on January 1, 2021, for $6,600. The entire amount was debited to insurance expense and no adjusting entry was recorded for this item.

Dr Prepaid insurance 4,000

Cr Insurance expense 4,000

b. During 2021, the company received a $850 cash advance from a customer for merchandise to be manufactured and shipped in 2022. The $850 was credited to sales revenue. No entry was recorded for the cost of merchandise.

Dr Sales revenue 850

Cr Unearned revenue 850

c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing $900 were on hand at December 31.

Dr Supplies 900

Cr Supplies expense 900

d. Hales borrowed $25,000 from a local bank on October 1, 2021. Principal and interest at 12% will be paid on September 30, 2022. No accrual was recorded for interest.

Dr Interest expense 750

Cr Interest payable 750

e. Net income reported in the 2021 income statement is $40,000 before reflecting any of the above items.

net income after adjustments = $40,000 + $4,000 - $850 + $900 - $750 = $43,300

4 0

3 years ago

Mason Automotive is an automotive parts company that sells car parts and provides car service to customers. This is Mason's firs

miv72 [106K]

Answer:

1) Mason Automotive sells 10,000,000 shares at $5 par for $30 on January 1st, 2018.

Dr Cash 300,000,000

Cr Common stock 50,000,000

Cr Additional paid in capital 250,000,000

2) Ed Mason, the CEO, hires 3,000 employees, whom will receive a combined salary of $12 Million on a monthly basis. The employees started on January 1st and will be paid for the month of January on February 5th. Employee's withholdings are as follows: 10% for federal income taxes 5% for state income taxes and 7% for FICA. Record the necessary entry as of January 1st, 2019.

No journal entry required

Adjusting entry:

January 31, 2018, wages expense

Dr Wages expense 12,000,000

Dr FICA taxes expense 840,000

Cr Federal income taxes withheld payable 1,200,000

Cr State income taxes withheld payable 600,000

Cr FICA taxes withheld payable 840,000

Cr FICA taxes payable 840,000

Cr Wages payable 9,360,000

3) Mason Automotive issues a bond payable on January 1st, 2018 with a face value of $200 Million at 102. The bond will have a useful life of 5 years with an interest payment of 5% (Annual Percentage Rate) due at the end of the month. Record the necessary journal entry as of January 1st, 2018.

Dr Cash 204,000,000

Cr Premium on bonds payable 4,000,000

Cr Bonds payable 200,000,000

(Note: When considering the amortization of the discount or premium, assume the straight line method is used).

Adjusting entry

January 31, 2018, interest expense

Dr interest expense 766,666.66

Dr Premium on bonds payable 66,666.67

Cr Interest payable 833,333.33

4) Mason Automotive purchased $80 Million dollars worth of inventory on January 2nd, 2018. $80 Million was paid with cash with the remaining balance on account. Mason notes that it will use a perpetual inventory system to track inventory.

Dr Inventory 80,000,000

Cr Accounts payable 80,000,000

5) Mason Automotive purchases fixed assets of $120 Million that will have a useful life of 10 years and no salvage value on January 2, 2018. $20 million was paid with cash with the remaining balance on account. These assets are depreciated using the straight-line method.

Dr Fixed assets 120,000,000

Cr Cash 20,000,000

Cr Accounts payable 100,000,000

Adjusting entry:

January 31, 2019, depreciation expense

Dr Depreciation expense 1,000,000

Cr Accumulated depreciation - fixed assets 1,000,000

6) On January 2nd, Mason Automotive shipped an order to Corby Panther Company. The shipping terms were FOB shipping point and the value of the order was $50 Million and the inventory cost was $20 Million. Assume that this sale was made on account.

Dr Accounts receivable 50,000,000

Cr Sales revenue 50,000,000

Dr Cost of goods sold 20,000,000

Cr Inventory 20,000,000

Adjusting entry:

January 31, 2018, allowance for doubtful accounts (5%)

Dr Bad debt expense 2,500,000

Cr Allowance for doubtful accounts 2,500,000

7) On January 3, Mason Automotive receives $75 Million advance payment from a customer, Michael Scott Paper Company, to manufacture 7,500 cars.

Dr Cash 75,000,000

Cr Deferred revenue 75,000,000

Adjusting entry:

January 31, 2019, 4,000 cars were finished and delivered

Dr Deferred revenue 40,000,000

Cr Sales revenue 40,000,000

Dr Cost of goods sold 32,000,000

Cr Inventory: finished cars 32,000,000

8) Mason Automotive buys a patent from Apple for $24 Million on January 3rd, 2018. The patent has a legal life of 20 years, but a the useful life of 10. Record the necessary entry as of January 3rd, 2018. Assume the patent was purchased using cash.

Dr Patent 24,000,000

Cr Cash 24,000,000

Adjusting entry:

January 31, 2018, patent amortization expense

Dr Patent amortization expense 200,000

Cr Patent 200,000

9) Mason Automotive purchased $2 Million dollars worth of supplies on account on January 4, 2018.

Dr Supplies 2,000,000

Cr Cash 1,500,000

Cr Accounts payable 500,000

Adjusting entry

January 31, 2018, supplies expense

Dr Supplies expense 500,000

Cr Supplies 500,000

10) Mason Automotive pre-pays for Rent Expense for the next year of $12 Million and Insurance Expense of $2.4 Million on January 4, 2018.

Dr Prepaid rent 12,000,000

Dr Prepaid insurance 2,400,000

Cr Cash 14,400,000

Adjusting entries:

January 31, 2019, rent expense

Dr Rent expense 1,000,000

Cr Prepaid rent 1,000,000

January 31, 2019, insurance expense

Dr Insurance expense 200,000

Cr Prepaid insurance 200,000

11) On January 20th, Mason Automotive decides to purchase 2,000,000 shares of Treasury stock at $25 per share.

Dr Treasury stock 50,000,000

Cr Cash 50,000,000

<h2>Closing journal entries:</h2>

Dr Sales revenue 90,000,000

Cr Income summary 90,000,000

Dr Income summary 71,006,66.66

Cr Wages expense 12,000,000

Cr FICA taxes expense 840,000

Cr interest expense 766,666.66

Cr Depreciation expense 1,000,000

Cr Cost of goods sold 52,000,000

Cr Bad debt expense 2,500,000

Cr Patent amortization expense 200,000

Cr Supplies expense 500,000

Cr Rent expense 1,000,000

Cr Insurance expense 200,000

Dr Income summary 18,993,333.34

Cr Retained earnings 18,993,333.34

8 0

3 years ago