Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its
2 answers:
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Solution:
The reserve ratio is 10%.
Money multiplier = =
= 10.
So, the money multiplier increases by 10.
Money supply = amount x money multiplier = 1,000 x 10 = 10000
Therefore, because any certain items are equivalent, the rise in the currency supply is 10000 dollars.
When the FED sells 1,000 million worth of debt, this would further increase the monetary market, as the investments are fresh funds and the income from the bank is now used in the money supply.
<u>Solution and Explanation:</u>
1 Amount of depletion, impairment and amortization for the current year
A Cost of timber rights on a tract of land $3,461,120
Estimated stand of timber 5,408,000
Cost of depletion per board feet (3461120 divided by 5408000) $0.64
Current year depletion charges for 1,028,300 board feet $658,112
B Impairment loss $3,640,000
C Cost of Patent $6,108,000
Estimated economic life 10 years
Amortization period 3/4
Amortization $458,100
2 <u>Adjusting entries </u>
Account Titles Debit Credit
a Depletion expense $658,112
Accumulated depletion $658,112
b Loss from Impaired Goodwill $3,640,000
Goodwill $3,640,000
c Amortization expense-Patents $458,100
Patents $458,100