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mario62 [17]
3 years ago
9

The balance sheet below is for the First Federal Bank. Assume the required reserve ratio is 20 percent.

Business
1 answer:
lord [1]3 years ago
3 0

Answer:

The answer is option (3) $200,000

Explanation:

Solution

Given that:

The reserve ratio =20%

The Required reserves = 300000*20/100

=60000

The excess reserves = 100000-60000

=$40000

Thus

The Money multiplier = 1/0.20

= 5

Therefore, maximum amount by which loans could be expanded = 40000*5

= $200000

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Which of the following transactions are included in gross domestic product, and by how much does the GDP raise?
seropon [69]

Answer:

A. Smith pays a carpenter $50,000 to build a garage.  ⇒ INCLUDED, increases GDP by $50,000 because Smith paid for the garage.

B. Smith purchases $10,000 worth of materials and builds a garage, which is worth $50,000.  ⇒ INCLUDED, increases GDP by $10,000 only because Smith built the garage himself.

C. Smith goes to the woods, cut down a tree, and uses the wood to build himself a garage that is worth $50,000.  ⇒ NOT INCLUDED, no services or goods were exchanged, it is the same as growing your own food.

D. The Jones family sells its old house to the Reynolds family for $400,000. The Joneses then buy a newly constructed house from a builder for $500,000.  ⇒ INCLUDED, increases GDP by $500,000 because the Joneses purchased anew house.

E. You purchase a used computer from a friend for $200.  ⇒ NOT INCLUDED, only new goods and services are included.

F. Your university purchases a new mainframe computer from IBM, paying $25,000.   ⇒ INCLUDED, increases GDP by $25,000 because the university purchased a new computer.

G. You win $100 in an Atlantic City casino. ⇒ NOT INCLUDED, casino earnings or lottery earnings are not considered new products or services.

5 0
2 years ago
The maximum amount of a product that sellers are willing and able to provide for sale over a relevant range of prices, holding a
Vera_Pavlovna [14]

Answer:

SUPPLY

LAW OF SUPPLY

Explanation:

Supply is the buyer's ability & willingness to sell at a given price, period of time.

Law of Supply states : Positive relationship between price & quantity demanded, other factors remaining constant. It implies higher price increases supply, lower price decreases supply (other factors same)

3 0
3 years ago
"Zurich Company reports pretax financial income of $70,000 for 2014. The following items cause taxable income to be different th
Ivan

Answer:

Explanation:

Income tax expense: The expense account that reveals the amount of pre-determined tax paid on income for a required period of time is known as income tax expense account. The following formula can be used to determine the income tax expense:

Income tax expense = (Income before tax\times Income tax rate

Income statement: This is the financial statement of a company which reports all the revenues that are earned and expenses that are to be expended by the company on the immediate accounting year. Income statement is also known profit and loss statement.

Rules for debit and credit:

  • When asset increases, debit it and when asset decreases, credit it.

  • When liabilities increase, credit it and when liabilities decrease, debit it.

  • When stockholders’ equity increases, credit it and when stockholders’ equity decreases, debit it.

  • When the expenses and losses increase, debit them and when the expenses and losses decrease, credit it.

  • When incomes and gains increase, credit them and when incomes and gains decrease debit them.

Earnings before tax: It is the revenue of a company before adjustment of tax. It consists of all operating expenses. It is the earning retained by the company.

1.) To calculate the taxable income and income tax payable:

    Particulars                              Current year      Deferred asset     Deferred liability

Financial income                            $70,000

Excess tax collected                      $16,000                                           $16,000

Excess rent collected                    $22,000              -$22,000

Fines (permanent)                          $11,000

Taxable income(IRS)                     $87,000              -$22,000            $16,000

Tax rate                                           30%                      30%                     30%

Income tax                                     $26,100               -$6,600              $4,800

Therefore, the taxable income is $87,000, and the income tax is $26,100 for current year.        

The taxable income is calculated by adding the income earned, which are eligible for taxation. The financial income is $70,000, the excess tax depreciation is $16,000 (which should be deducted), and the excess rent collected is $22,000. The fines are $11,000. It is taxable as it is permanent. Thus, the taxable income is $87,000. The tax rate is 30 percent. The taxable income should be multiplied with the tax rate. Thus, the taxable income is $26,100. It is income tax payable.

2.) To Prepare a journal entry to record income tax expense, deferred income taxes, and income tax payable for 2014.

Date      Account titles and ex[planations      Debit           Credit

2014      Income tax expense                          $24,300

             Deferred tax asset                             $6,600

             Deferred tax liability                                                  $4,800

             Income tax payable                                                  $26,100

Therefore, income tax expense is debited with $24,300, deferred tax asset is debited with $6,600, deferred tax liability is credited with $4,800, and the income tax payable is credited with $26,100.

It is given that the income tax expense, deferred income taxes, and income taxes payable should be recorded. The income tax expense is $24,300, deferred tax asset is $6,600, deferred liability is $4,800, and the income tax payable is $26,100. The income tax payable is calculated by adding the income tax expense to the deferred tax asset and deducting the obtained value from the liability. Thus, $24,300 is added to $6,600 and deducted by $4,800 and $26,100. Therefore, the income tax expense is debited with $24,300, deferred tax asset is debited with $6,600, deferred tax liability is credited with $4,800, and the income tax payable is credited with $26,100.

3.) To Prepare the income tax expense section of the income statement for 2014.

                                      Income Statement

Particulars                                             Amount       Amount

Income before taxes                                                 $70,000

Income tax expenses current             $26,100

Income tax expenses deferred          -$1,800         $24,300

Net income(loss)                                                       $45,700

It is given that the income before taxes is $70,000, income tax expense of current year is $26,100, and for the deferred year is $1,800. The net income tax expense is $24,300. The net income is calculated by deducting the income before taxes from the income tax expenses. Thus, $24,300 is deducted from $70,000. Therefore, the net income is $45,700.

6 0
3 years ago
The Benesch Company expects sales in 2018 of 205,000 units of serving trays. Benesch​'s beginning inventory for 2018 is 18,000 ​
ozzi

Answer:

214,000 trays

Explanation:

Budgeted sales in unit. 205,000

Add: targeted ending inventory 27,000

Total requirements. 232,000

Deduct: beginning inventory (18,000)

Budgeted units to be prod. 214,000

6 0
2 years ago
You and a friend are debating the merits of using monetary policy during a severe recession. Your friend says that the central b
Gala2k [10]

Answer:

The correct answer is "yes, I agree with his reasoning"

Explanation:

Zero nominal interest rate joined with a three percent inflation rate yields a negative connotation for the real​ rate, which is the rate that is important for investment decisiveness.

7 0
3 years ago
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