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4 years ago

If education produces positive externalities, we would expect:

Business

1 answer:

kap26 [50]4 years ago

3 0

Answer:

D. Government to subsidize education

Explanation:

Externalities reflect benefit / harm to third party , without being reflected in price . These can be positive (beneficial) / negative (harmful) , egs - wildlife sancturies and pollution respectively .

Positive Externalities : Total Benefit to society > Private benefit to the person consuming [Total Benefit = Private Benefit + Social Benefit]. Negative Externalities : Total Cost to Society > Private Cost beared by person consuming [Total Cost = Private Cost + Social Cost]

Positive externalities' extra social benefit & negative externalities' extra social cost are not reflected in their price. So, govt increases tax on negative externalities (to accomodate extra social cost) & subsidises positive externalities (to accomodate extra social benefit) .This makes correction of underproduction of positive externalities & over production of negative externalities (based on private Benefit = Cost equalisation) .

Education is a positive externality because it doesn't only create benefit (private) for the person consuming , but also creates extra social awareness benefits . Hence , as per the above explanation : education being a positive externality ,would be subsidized .

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On June 1, 2020, Forde Auto Manufacturer sells a 4-door sedan to a dealer for $6,000, which includes three years of maintenance.

hichkok12 [17]

Answer:

Part a

Allocation based on Stand Alone Selling Prices :

4 - door Sedan and the 3 years maintenance contract = $6,400
Cash incentive = $100

Part b

Journal entry :

Debit : Cash $130,000

Credit : Revenue - 4 - door Sedan $128,000

Credit : Revenue - Cash incentive $2,000

Explanation:

It is important to identify the step in IFRS 15 - Revenue from Contracts with Customers, which is affected by the question.

Here, Step 2 - Identify the performance obligation in the contract, Step 3 - Determine the Transaction Price, Step 4 - Allocate the Transaction Price to the Performance obligation and Step 5 - Recognize the Revenue as or when the Performance Obligation is Satisfied. These are explained and applied as follows :

Step 2 - Identify the performance obligation in the contract.

Here, identify the individual promises (Performance Obligations) that the entity has committed to transfer to the customer.

Also the entity identifies each performance obligation that is distinct, or a series of distinct Goods or Services that are substantially the same and have the same pattern of transfer to the customer.

So, the performance obligations are as follows :

4 - door Sedan and the 3 years maintenance contract(these can not be consumed independently from one another)
Cash incentive (can be consumed independently from the rest of the performance obligations)

Step 3 - Determine the Transaction Price

Transaction price is the consideration the entity expects to be entitled to in exchange of goods or services transferred to the customer.

Transaction Price is $6,500 ($6,000 + $400 + $100)

Step 4 - Allocate the Transaction Price to the Performance obligation

Allocation of Transaction Price is done based on Stand Alone Selling Prices.

Stand alone selling prices have already been identified :

4 - door Sedan and the 3 years maintenance contract = $6,400
Cash incentive = $100

Step 5 - Recognize the Revenue as or when the Performance Obligation is Satisfied

Stand alone for 20 vehicles :

4 - door Sedan and the 3 years maintenance contract = $6,400 x 20 = $128,000
Cash incentive = $100 x 20 = $2,000

Journal entry :

Debit : Cash $130,000

Credit : Revenue - 4 - door Sedan $128,000

Credit : Revenue - Cash incentive $2,000

8 0

3 years ago

What is the purpose of a report?

amm1812

Reports communicate information which has been compiled as a result of research and analysis of data and of issues. So I think that variant B will be correct. What will be also useful for you is to be aware of the site where your report or a research paper may be written from the scratch or proofread. Check, please, Marvelous essay service. I am sure you can easily get the help there.

3 0

3 years ago

Read 2 more answers

oneycutt Co. is comparing two different capital structures. Plan I would result in 39,000 shares of stock and $108,000 in debt.

Mila [183]

Answer:

All equity plan:

EPS = $160,000 / 42,000 = $3.81

Plan I:

EPS = [$160,000 - ($108,000 x 7%)] / 39,000 = $152,440 / 39,000 = $3.91

Plan II:

EPS = [$160,000 - ($324,000 x 7%)] / 33,000 = $137,320 / 33,000 = $4.16

Plan II is better since the resulting EPS is higher than the other alternatives.

8 0

3 years ago

Adventure Travel signed a 14%, 10-year note for $151,000. The company paid an installment of $2100 for the first month. After th

pychu [463]

Answer:

$147,138.34

Explanation:

Interest Expense for 1 month = $151,000 * 14% * (1/12)

Interest Expense for 1 month = $151,000 * 0.14 * 0.083333

Interest Expense for 1 month = $1761.65962

Interest Expense for 1 month = $1,761.66

Principal amount = Total payment + Interest Expense for 1 month

Principal amount = $2,100 + $1,761.66

Principal amount = $3,861.66

Principal balance = $151,000 - $3,861.66

Principal balance = $147,138.34

4 0

3 years ago

You are considering adding a microbrewery on to one of your firm's existing restaurants. This will entail an increase in invento

Contact [7]

Answer:

The change in net working capital resulting from the addition of the microbrewery is $5,500 (decrease)

Explanation:

There are 3 key elements of working capital. These are;

Inventory
Accounts payable
Accounts receivable

Given;

increase in inventory = $8,000

increase in Accounts payable = $2,500

Change in net working capital resulting from the addition of the microbrewery = -$8,000 + $2,500

= -$5,500

8 0

3 years ago