Answer:
(B) False
Explanation:
In fact, if assets have a fixed monetary value, increasing the overall price level (inflation) will reduce the real value of these assets. Thus, the purchasing power of the holders of these assets will decrease. However, it is not correct to say that the holders of these titles have reduced their spending, since what determines spending is individual perceptions and needs. Some of the holders may decrease their spending in the face of an inflationary process, but others may maintain or even increase their spending.
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Answer:
$13,316.54
Explanation:
Data provided in the question:
Inflation rate, i = 1.2% = 0.012
Deposits = $11,000
Interest rate, r = 6% = 0.06
Time, t = 4 years
since compounded monthly, number of periods n = 12
Now,
Future value of money with the interest
= Deposits × ![[1+ \frac{r}{n}]^{n.t}](https://tex.z-dn.net/?f=%5B1%2B%20%5Cfrac%7Br%7D%7Bn%7D%5D%5E%7Bn.t%7D)
= $11,000 × ![[1+ \frac{0.06}{12}]^{12\times4}](https://tex.z-dn.net/?f=%5B1%2B%20%5Cfrac%7B0.06%7D%7B12%7D%5D%5E%7B12%5Ctimes4%7D)
= $13,975.38
Considering the inflation,
Amount after 4 years = Future value × [1 - i ]ⁿ
= $13,975.38 × [1 - 0.012]⁴
= $13,316.54
Answer:
Please see explanation
Explanation:
The Net book value of the tractor after three years of the purchase is given as follow:
Net book value= Cost - Accumulated depreciation for three years
=27,000-((27,000-3,500)/5*3)
=27,00-14,100
=$12,900
1. The journal entry to be recorded in respect of sales of tractor is given below:
Debit Credit
Bank $14,400
Accumulated depreciation $14,100
((27,000-3,500)/5*3)
Tractor $27,000
Gain on sale of asset $1,500
2. If the asset was sold for $9,400 instead of $14,400, then the following journal entry shall be made:
Debit Credit
Bank $9,400
Accumulated depreciation $14,100
Loss on sale of asset $3,500
Tractor $27,000
Answer: Income statement shows the performance for the year. Balance sheet shows the financial position at the end of the year. Cash flow statement shows the sources and uses of cash.
Explanation: From the above we can categorize the given elements as follows:-
A. assets = balance sheet
B. revenues = income statement
C. cash flow from investing activities = cash flow statement
D. Stockholders equity = Balance sheet
E. Expenses = income statement.
F. Net change in cash = cash flow statement
G. Net income = Income statement
H. Liabilities = Balance sheet
