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Studentka2010 [4]
3 years ago
10

If a Phillips curve shows that unemployment is high and inflation is low in the economy, then that economy:

Business
1 answer:
Rasek [7]3 years ago
4 0

Answer:

is producing at a point where output is less than potential GDP.

Explanation:

When the unemployment is high it is obvious that the economy is under its potential level but there is inflation case so we need to know the meaning of Philips Curve. The aggregate demand and aggregate supply model provides a simple summary of the possible outcomes proposed by the Phillips curve. The Phillips curve shows the combination of inflation and unemployment arising when the economy of the aggregate demand curve in the short run shifts along the short-term aggregate supply curve. Increased demand for goods and services will lead to higher prices in the short term and increased output of goods and services. Increasing output means increasing employment and lowering unemployment. In addition, the higher the rate this year, the higher the rate of inflation, no matter what the price level is in the past. Thus, the change in aggregate demand leads to short-term changes in inflation and unemployment rates, which is consistent with the dependence described in the Phillips curve. Monetary and fiscal policy tools are used to influence the aggregate demand curve, that is, to move the economy along the Phillips curve. Increasing money supply, government spending, or tax cuts move the aggregate demand curve to the right and drives the economy to a point where the Phillips curve corresponds to lower unemployment and higher inflation. Reducing money supply, government spending, or raising taxes will push the aggregate demand curve to the left, while the economy shifts to the point where Phillips curves with lower inflation and higher unemployment. In this sense, the Phillips curve offers policymakers a set of combinations of inflation and unemployment.

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A factory costs $460,000. You forecast that it will produce cash inflows of $150,000 in year 1, $210,000 in year 2, and $360,000
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Explanation:

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On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances:
Anna11 [10]

Answer:

TNT Fireworks

a. Multiple-step Income Statement for the period ended January 31, 2021:

Sales revenue                         $220,000

Cost of goods sold                     115,000

Gross profit                              $105,000

Interest Revenue                                50

Expenses:

Depreciation exp.      3,600

Salaries expense    62,400

Utilities expense     16,500

Bad debt expense   5,900      $88,400

Income before tax                   $16,650

Income taxes exp                        9,000

Net income                                $7,650

Beginning Retained Earnings  50,000

Ending Retained earnings     $57,650

b. Classified Balance Sheet as of January 31, 2021:

Assets

Current assets:

Cash                              $5,400

Accounts Receivable 223,000

Allowance for

Uncollectible Accounts (8,100)

Interest Receivable             50

Inventory                        4,200    $224,550

Long-term assets

Notes Receivable (5%,

due in 2 years)           12,000

Land                          155,000

Equipment                  19,500

Depreciation               (3,600)     $182,900

Total assets                                $407,450

Liabilities and equity

Current liabilities:

Accounts Payable                        $88,200

Salaries payable                            32,600

Income taxes payable                     9,000

Total liabilities                            $129,800

Equity:

Common Stock                        $220,000

Retained Earnings                        57,650

Total equity                              $277,650

Total liabilities and equity       $407,450

c. Closing Entries:

Accounts                       Debit      Credit

Sales revenue        $220,000

Interest Revenue               50

Income summary                     $220,050

To close sales and interest revenue to the income summary.

Income Summary  $212,400

Cost of goods sold                   $115,000

Depreciation exp.                          3,600

Salaries expense                        62,400

Utilities expense                         16,500

Bad debt expense                       5,900

Income taxes exp                        9,000

To close cost of goods sold and expenses to the income summary.

Income summary     $7,650

Retained earnings                   $7,650

To close the net income to the retained earnings.

Explanation:

a) Data and Calculations:

Account Balances:

Accounts                       Debit      Credit

Cash                          $58,700

Accounts Receivable 25,000

Allowance for

Uncollectible Accounts             $2,200

Inventory                   36,300

Notes Receivable (5%,

due in 2 years)         12,000

Land                        155,000

Accounts Payable                       14,800

Common Stock                       220,000

Retained Earnings                    50,000

Totals                  $287,000 $287,000

Analysis of Transactions:

January 1 Equipment $19,500  Cash $19,500

January 4 Accounts payable, $9,500 Cash $9,500

January 8 Inventory $82,900 Accounts payable $82,900

January 15 Cash $22,000 Accounts receivable, $22,000

January 19 Salaries expense $29,800 Cash $29,800

January 28 Utilities expense, $16,500 Cash $16,500

January 30 Accounts receivable $220,000 Sales revenue $220,000

Cost goods sold $115,000 Inventory $115,000

Accounts                       Debit      Credit

Cash                          $58,700 - 19,500 -9,500 +22,000 - 29,800 - 16,500

= $5,400

Accounts Receivable 25,000 - 22,000 + 220,000 = 223,000

Interest Receivable           50

Allowance for

Uncollectible Accounts             $2,200 + 5,900 = 8,100

Inventory                   36,300 + 82,900 - 115,000 = 4,200

Notes Receivable (5%,

due in 2 years)         12,000

Land                        155,000

Equipment                19,500

Accumulated depreciation          3,600

Accounts Payable                       14,800 - 9,500 + 82,900 = 88,200

Salaries payable                        32,600

Income Taxes Payable                9,000

Common Stock                       220,000

Retained Earnings                    50,000

Sales revenue                        220,000

Interest Revenue                             50

Cost of goods sold 115,000

Depreciation exp.      3,600

Salaries expense    29,800 + 32,600 = 62,400

Utilities expense     16,500

Bad debt expense   5,900

Income Taxes          9,000  

Totals                  $287,000 $287,000

Adjusting entries:

Depreciation expenses $3,600 Accumulated depreciation $3,600

Allowance for Uncollectible Accounts = $1,500

Allowance for uncollectible accounts = $6,600 ($220,000 * 3%)

Total allowance for uncollectible = $8,100 ($1,500 + $6,600)

Bad debts expense $ 5,900 Allowance for Uncollectible $5,900

Interest Receivable $50 Interest Revenue = $50 ($12,000 * 5% * 1/12)

Salaries Expense $32,600 Salaries payable $32,600

Income Taxes $9,000 Income Taxes Payable $9,000

Adjusted Trial Balance

As of January 31, 2021

Accounts                       Debit      Credit

Cash                              $5,400

Accounts Receivable 223,000

Interest Receivable             50

Allowance for

Uncollectible Accounts               $8,100

Inventory                        4,200

Notes Receivable (5%,

due in 2 years)           12,000

Land                          155,000

Equipment                  19,500

Accumulated depreciation          3,600

Accounts Payable                      88,200

Salaries payable                        32,600

Income taxes payable                 9,000

Common Stock                       220,000

Retained Earnings                    50,000

Sales revenue                        220,000

Interest Revenue                             50

Cost of goods sold 115,000

Depreciation exp.      3,600

Salaries expense    62,400

Utilities expense     16,500

Bad debt expense   5,900

Income taxes exp    9,000

Totals                 $631,550 $631,550

8 0
3 years ago
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