Customers since they are the clients who are purchasing the supply
Answer:
C. $40,000
Explanation:
For computing the amount of the gain recognized, first we have to calculate the gain recognized based on the adjusted basis
= Cash received + fair market value of the stock - adjusted cash basis
= $40,000 + $60,000 - $35,000
= $100,000 -$35,000
= $65,000
But the cash is received for $40,000. So, only $40,000 of gain would be recognized. As in the case of transfer, if the amount is received other than the stock so the amount which is received is recognized as a gain i.e $40,000
C would be the best choice I think
Answer:
1. Cash balance will decrease
2. Cash-basis net income will decrease
3. Accrual-basis net income will decrease
Explanation:
$900 was paid to the workers by the company in May for $600 work performed in April and $300 in May. If the company follows cash basis, then cash balance will reduce by $900. If the company follows accrual-basis, then cash balance will reduce by $300.
Cash basis net income will decrease by $900 while accrual basis net income will reduce by $300 as $600 would have been accounted in April.
Answer:
The correct answer is letter "D": $77 million; $8 million.
Explanation:
The U.S. Federal Reserve (Fed) establishes a minimum amount of money banks must have in front of unexpected demand. That minimum is called Bank Reserve. <em>The current bank reserve set by the Fed is 10% of the bank's demand and checking deposits.
</em>
Excess reserves <em>is the amount of money banks have on top of the bank reserve</em> that cannot loan. As banks do not profit in interest with that amount of money, they do not tend to have much excess reserves.
In the case:
- Bank required reserve = $770,000,000 x 10%
- Bank required reserve = $77,000,000 = $77 million
- Excess reserve = $85,000,000 - $77,000,000
- Excess reserve = $8 million
