Answer:
1. Prepare an income statement for Allstar for the past month.
The income statement is given below.
Sales $ 410,000
Commission Cost ($ 50,000)
Technology Cost ($ 75,000)
R/D Cost* ($ 200,000)
Selling expenses ($ 10,000)
Admin expenses ($ 35,000)
Net profit $ 40,000
* In absence of information it is assumed that research and development costs of $200,000 meet defination of expense as per accounting standard (IAS 38).
2. Briefly explain why Allstar's income statement has no line for cost of goods sold.
As per question Allstars is a service oriented company. In services oriented company there is no good that company is manufacturing and selling. So there will not be any cost of good sold line item in income statement.
They are forms of Communication.
There are options available for Lyman :
Either he
- Sell his equity to his investors, ( which mean that he have to give away a percentage of his company)
- Or he can get some Loans
I he should consider Loans, because his annual revenues already way higher than the amount of loans that he need, he could easily paid it off
Answer:
e. there is downward pressure on the price level, and the government may want to conduct expansionary fiscal policy.
Explanation:
At the time of boom in the economy, the unemployment rate is beneath than the rate i.e. natural also it gives rise to the growth of the economy, along with it the expenditures, consumer spending also increased that ultimately increased the disposable income.
This results in the upward movement in terms of pressure on the aggregate demand that leads to a rise in the level of price and the real GDP also rises which reduced the unemployment
But when the aggregate demand is less so there is a downward pressure on the price as the level of price declines so that the aggregate demand increased and it is requirement made by the government for an expansionary fiscal policy that give increased in government spending or taxes decreased in order to raise the aggregate demand
