Answer:<u><em>Excess Reserve = $ 27,000 - $ 22,000 = $ 5,000 </em></u>
Explanation:
Given:
Assets
:
Reserves = $27,000
Loans = $50,000
Securities = $33,000
Property = $200,000
Liabilities and net worth
:
Demand deposits = $110,000
Capital stock = $200,000
First we'll compute required reserve using the following formula:
Excess Reserves (ER) = Total Reserves - Required Reserves
where;
Required Reserves = the Required Reserve Ratio (RR) x DEPOSITS
Required Reserves = 0.20 x $ 110,000 = $ 22,000
∴
<u><em>Excess Reserve = $ 27,000 - $ 22,000 = $ 5,000 </em></u>
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Answer: Physical safeguard & security, Accuracy, Segregation of duties, Handling errors
Explanation:
Internal control could be defined as the process of handling an organization accounting and auditing process with it's specified objectives in compliance with laws, regulations and policies.
Here are the four purpose of internal control;
a) Physical safeguard & security; this is to ensure that physical assets and information have a controlled asses, and it's not easily assessible by anyone.
b) Accuracy: this is to ensure that all transactions are accurate when records are checked with the source of information where the transaction took place and the time it occurred.
c) Segregation of duties; this ensures that one individual cannot have access to the recording of information and processing of transaction.
d) Handling errors; this ensures that errors are checked at any stage with transaction occurred with corrections also made
Answer:
you are able to make better informed decisions
Explanation:
by being well informed on a product you are able to make decisions and see potential problems ahead of the actual problem
Solution :
a). In the context, Jim received $ 275 for the car repairing services form some member from the club. In this exchange of the services, an income is been received in amount of a value of the services received ( the gross income includes receipt of the services and also the money and goods). Therefore, Jim is being taxed on an amount of $275 for the car repair services.
b). The issue in this case is whether a "credit" represents the valuable right. As the right can be redeemed for the that is property worth of $150, then under the constructive receipt, Jim must recognize an income of $150.
c). Jim received an credit of $450 to be applied for the next year. If the credit can be redeemed or used for any future services, the taxpayer then can argue that the realization has not yet occurred. But, it has be included in Jim's gross income for the next year when his credit amount becomes the valuable right.
