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Evgesh-ka [11]
3 years ago
5

Q6. Explain why most experts believe that official U.S. data underestimate the actual rate of unemployment. What factors could m

ake the official rate overstate the actual unemployment rate?
Business
1 answer:
ololo11 [35]3 years ago
6 0

The official rate overstate the actual unemployment rate because it is hard to ascertain how many people are a part of the labor force.

Explanation:

The unemployment rate is computed by measuring the percentage of those who are available in the labor force but remain unemployed.

The unemployment data is thus found out monthly, this also makes it difficult to define the labor force every month as it can fluctuate due to the reasons people have for not seeking jobs at a certain point of time.

Number of unemployed is divided by the number in the labor force to find the unemployment rate but the faulty measures mean that it is hard to ascertain which data is correct.

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On January 15, 2019, Dillon purchased the rights to a mineral interest for $3,500,000. At that time, it was estimated that the r
lutik1710 [3]

Answer:

$175,000

Explanation:

Depletion per Unit =$3500000 / 500000 = $7 per unit

25,000 units were sold during the year.

There are two ways of figuring depletion on mineral property.

1. Cost Depletion

2. Percentage Depletion

Generally, we must use the method that gives you the larger deduction.

Calculation of Cost Depletion:

Cost Depletion = Units Sold * Depletion Rate = 25,000 units * $7 per unit = 175,000

Calculation of Percentage Depletion:

Percentage Depletion = Gross Income from Property During the Year * Depletion Rate = 800,000 * 22% = 176,000

Percentage Depletion cannot be more than 50% of net taxable income from the property.

Percentage Limit = (Sales - Expenses ) * 50% = (800,000 - 500,000) * 50% = 300000*50% = 150,000

Thus Percentage Depletion is limited to $150,000

Thus, the deduction is $175,000 (Higher to Cost or Percentage Depletion)

7 0
3 years ago
Cash interest is computed annually when a bond is issued for other than its face value. For a bond issued at a premium, how will
sergeinik [125]

Answer:

Under the effective interest method, as a bond approaches maturity, the interest expense decreases while the amortization of the bond premium increases.

Explanation:

E.g. a company issues $800,000 in 8% bonds when the market rate is 7%, so the bonds price is $856,850 (semiannual coupons are paid).

Journal entry to record the issuance

Dr Cash 856,850

    Cr Bonds payable 800,000

   Cr Premium on bonds payable 56,850

amortization of bond premium on first coupon payment:

($856,850 x 3.5%) - ($800,000 x 4%) = $29,989.75 - $32,000 = -$2,010.25 ≈ -$2,010

Journal entry to record first coupon payment:

Dr Interest expense 29,990

Dr Premium on bonds payable 2,010

    Cr Cash 32,000

amortization of bond premium on second coupon payment:

($854,840 x 3.5%) - ($800,000 x 4%) = $29,919.40 - $32,000 = -$2,080.60 ≈ -$2,081

Journal entry to record second coupon payment:

Dr Interest expense 29,919

Dr Premium on bonds payable 2,081

    Cr Cash 32,000

7 0
3 years ago
Susan Zupan, a lawyer, accepts a legal engagement in March, performs the work in April, and is paid in May. If Zupan's law firm
UkoKoshka [18]

Answer:

The month of April

Explanation:

Susan Zupan, a lawyer, accepts a legal engagement in March, performs the work in April, and is paid in May. If Zupan's law firm prepares monthly financial statements, the law firm should recognize the revenue in April because according to revenue recognition principle, revenue should be recognized in the accounting period in which services are performed, and Susan zupan performed the work in April so therefore the firm should recognize the revenue in April.

4 0
3 years ago
An initial decreasedecrease in a​ bank's reserves will decreasedecrease checkable deposits A. by an amount less than the decreas
svlad2 [7]

Answer:

The correct answer is B

Explanation:

Bank reserve is the minimum cash which is required to kept on hand through the financial institutions so that could meet the requirements of central bank.

Checkable deposits is a kind of any demand deposit account in anticipation of the checks or the drafts in any form which will be written. In short, it means that the owner of the account could withdraw funds on demand.

So, if the primary decrease in bank reserve will also decrease the checkable deposit as there would be no cash with bank to provide to customers by the amount that is greater than the decrease in the reserve.

8 0
2 years ago
What is the range for the relative price of cloth such that the economy produces both cloth and food? From _______ to _______ .
dezoksy [38]

The answer is explained in detail below

Explanation:

a_{KC} = 2

a_{LC} = 2

a_{KF} = 3

a_{LF} = 1

Labor, L = 2000; Capital, K = 3000  

Labour constraint,

2Q_{c} + Q_{F} \leq 2000

Capital constraint ,

2Q_{c} + 3Q_{F} \leq 3000  

Solving the equation further, we get

Q_{F} \leq 2000 - 2Q_{C}

Q_{F} \leq 1000 - \frac{2}{3} Q_{C}

  • The range for the relative price of cloth such that the economy produces both cloth and food is  2/3 and 2
  • Low cloth production → economy will use relatively more labor to  produce cloth → opportunity cost of cloth is 2/3rd units of food.
  • High cloth  production → economy dips on labor → taking capital away from food  production → raising opportunity cost of cloth to 2 units of food.  
  • If relative price of cloth lies between 2/3 and  2 units of food, the economy  produces both goods.
  • If the price of cloth decreases below 2/3 → complete  specialization in food production → low compensation for producing cloth
  • If the price of cloth  rises above 2 → complete specialization in cloth production → low compensation for producing  food
4 0
3 years ago
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