Answer:
The annual depreciation under SL is $16000 per year.
Explanation:
The depreciation expense under Straight Line (SL) method remains constant throughout an asset's useful life. The depreciation under straight line method is calculated by calculating the value of the asset that is eligible for depreciation, which is its cost less the salvage value (SV) and dividing it by the asset's useful life.
The straight line depreciation per year = (Cost - SV) / estimated useful life
Annual depreciation under SL = (100000 - 20000) / 5 = $16000 per year
Answer:
Dr Right of use asset 59,007.60
Cr Lease liability 59,007.60
Explanation:
Variable lease payments are generally not included as right of use asset or lease liability. Even though a 60% possibility exists that an additional $5,000 will be paid, they are not based on an index and are not disguised payments (only two exceptions to this rule).
Annual lease payments = $12,000
PV annuity factor, 6%, 6 periods = 4.9173
PV of lease payments = $12,000 x 4.9173 = $59,007.60
Answer and Explanation:
If demand is greater than supply, then there is inflation. Hence, the government has to devaluate its currency on net borrowings from abroad. Supply increases and price becomes stable.
The banks have to lower their bank rate and decrease CRR. When prices rise, consumption decreases and investment increases. When the interest rate is made high consumption and investment both become stable. Hence, there is full employment. Government has a fiscal policy to increase taxes and borrowings and increase the export and income rises and price becomes stable.
Answer:
D. Optimization, Equilibrium and Empiricism.
Explanation:
Economics is based on three key concepts which are Optimization, Equilibrium and Empiricism. Optimize is the first principle which means people will select best available option. Second important principle is that economy is always in a state of equilibrium which means if one gains the other also gets best available value. Third concept is that economists use data to make policies. The situation given in the scenario follows all the key concepts of economy.
