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3 years ago

The law of increasing costs means that when an economy increases the production of one item

1 answer:

3 0

The law of increasing costs means that when an economy increases the production of one item the opportunity cost goes up. It <span> is a principle that states that once all factors of production (land, labor, capital) are at maximum output and efficiency, producing more will </span>cost<span> more than average.</span>

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If a firm has retained earnings of $2.7 million, a common shares account of $4.7 million, and additional paid-in capital of $9.4

kodGreya [7K]

Answer:

Change in retained earnings = $1.02 million (Decrease)

Change in common shares account = $5.17 million (Increase)

Change in additional paid-in capital = $10.61 million (Increase)

Explanation:

Given:

Retained earnings = $2.7 million

Common shares account = $4.7 million

Additional paid-in capital = $9.4 million

Stock dividend = 10%

Find:

Changes in account.

Computation:

1. Change in retained earnings

Change in retained earnings = Retained earnings - (Retained earnings - Common shares account - Additional paid-in capital)Stock dividend

Change in retained earnings = $2.7 million - ($2.7 million - $4.7 million - $9.4 million)10%

Change in retained earnings = $2.7 million - 1.68 million

Change in retained earnings = $1.02 million (Decrease)

2. Change in common shares account

Change in common shares account = Common shares account (1+Stock dividend)

Change in common shares account = $4.7 million (1+10%)

Change in common shares account = $5.17 million (Increase)

3. Change in additional paid-in capital

Change in additional paid-in capital = Additional paid-in capital + (Additional paid-in capital + Retained earnings)Stock dividend

Change in additional paid-in capital = $9.4 million + ($9.4 million + $2.7 million)10%

Change in additional paid-in capital = $9.4 million + 1.21 million

Change in additional paid-in capital = $10.61 million (Increase)

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2 years ago

If a firm's forecasted sales are $250,000 and its break-even sales are $190,000, the margin of safety in dollars is: Multiple Ch

Oliga [24]

Answer:

Margin of safety= $60,000

Explanation:

Giving the following information:

A firm's forecasted sales are $250,000 and its break-even sales are $190,000.

The margin of safety is the excess of sales from the break-even point. To calculate the margin of safety, we need to use the following formula:

Margin of safety= (current sales level - break-even point)

Margin of safety= 250,000 - 190,000= 60,000

6 0

3 years ago

Honda Motor Company is considering offering a $ 1 comma 800 rebate on its minivan, lowering the vehicle's price from $ 30 comm

finlep [7]

Answer:

Taking into consideration only the income, the increase in unit sales will not increase the income of Honda. It can impact in other ways, like a decrease in inventory.

Explanation:

Giving the following information:

Honda Motor Company is considering offering an $1800 rebate on its minivan

New price $30200

Old price $28400.

The marketing group estimates that this rebate will increase sales over the next year from 42000 to 53900 vehicles.

Honda's profit margin with the rebate is $5650 per vehicle.

Normal price:

Income= (5650+1800)*42000= $312,900,000

New price:

Income= 5650* 53900= $304,535,000

Taking into consideration only the income, the increase in unit sales will not increase the income of Honda. It can impact in other ways, like a decrease in inventory.

6 0

3 years ago

What are the three basic tools used to implement U.S. monetary policy? Describe in detail how each tool can be used to both expa

Luba_88 [7]

Answer:

The three basic monetary policy tools used by the U.S are; The discount rate, open market operations and reserve requirement.

Explanation:

The discount rate – This is the rate charged by Reserve Banks when lending short term loans to Commercial Banks. If there is a wish to expand the economy, the discount rate is lowered. This, in a domino effect, causes other interest rates such as consumer lending by commercial banks to lower. This encourages lending and spending by consumers and businesses through an increase in the money supply. When there is a wish to implement a contractionary policy, the discount rate is lowered thus causing other lending and borrowing rates to increase. This discourages borrowing and lending, eventually reducing the money supply in the economy.

Open market operations – This policy is achieved through the buying and selling of U.S Government securities. To achieve expansionary effects on the economy, the Fed buys government securities from members of the public, increasing the economy’s money supply. If, on the other hand, contractionary effects are desired, the Fed sells government securities to members of the public, and thus reducing the money supply.

Reserve requirements – These are portions of deposits that banks must hold in cash, either with the Reserve Bank or in their vaults. When there is a desire to practice expansionary policies, the Reserve bank lowers the requirement level thus increasing the amount of money that is available for lending in the commercial banks. This increases the money supply. If the Fed wishes to contract the economy, then the reserve requirement level is decreased thus reducing the money available for lending and in a ripple effect, the general level of money supply reduces.

4 0

3 years ago

Sahia company bought a building for 90,000 cash and the land on which it was located for 1,10,000 cash. The company paid a trans

Alexxandr [17]

Answer:

Sahia Company

1. Net book value of the property at the end of year 2 = $217,800.

2. Journal entry to record the purchase:

Debit Property (land and building) $241,000

Credit Cash Account $241,000

To record the acquisition of the property.

3. Straight-line depreciation (on building only) = $11,600.

Explanation:

a) Data and Calculations:

Bought building for cash = $90,000

Bought land for cash = 110,000

Transfer cost = 10,000

Renovation on building = 31,000

Book value of property = $241,000

Depreciation:

Building cost = $90,000

Transfer cost 4,500 ($10,000*90,000/200,000)

Renovation 31,000

Total cost = $125,500

Residual value 9,000

Depreciable value = $116,000

Depreciation per annum = $11,600 ($116,000/10)

a) Land is not subject to depreciation and its value is $115,500 or $110,000 + 5,500 ($10,000*110,000/200,000).

b) The net book value of the property at the end of year 2 is

Building $125,500 - 23,200 = $102,300

Land = 115,500

Net book value of property = $217,800

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3 years ago