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3 years ago

Secondary reserves __________.

Business

1 answer:

iren2701 [21]3 years ago

3 0

Answer:

The correct option is A,can be converted into cash with low transaction costs.

Explanation:

Secondary reserves are the funds invested by bank in short term highly liquid investments,in essence can be converted to cash quickly at very low transaction costs in order to settle unexpected obligations.

Secondary reserves refer to the extra reserves maintained by the banks over and above the minimum regulatory reserve requirement mandated on banks by the Federal Reserve System.The Federal Reserve System as it is popularly known is the central bank in the US.

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On July1, 2018, Morrow Inc. purchased a spooler at a cost of $40,000. The equipment is expected to last five years and have a re

Mazyrski [523]

Answer:

(1) the double-declining-balance method

Depreciation for 2018 = $16,000

Depreciation for 2019 = $9,600

Book value of the spooler at December 31, 2018 = $24,000

Book value of the spooler at December 31, 2019 = $14,400

(2) the sum-of-year digits

Depreciation for 2018 = $12,000

Depreciation for 2019 = $9,600

Book value of the spooler at December 31, 2018 = $28,000

Book value of the spooler at December 31, 2019 = $18,400

Explanation:

(1) the double-declining-balance method

Note: See part 1 of the attached excel file for the computation of depreciation for 2018 and 2019 and the book value of the spooler at December 31, 2018 and 2019 using the double-declining-balance method.

Double-declining-balance method can be described as a depreciation technique in which the rate at which an asset is depreciated is twice depreciation rate for the straight line depreciation method.

The double-declining-balance depreciation rate for Morrow Inc. can therefore be calculated as follows:

Straight line depreciation rate = 1 / Number of expected useful years = 1 / 5 = 0.20, or 20%

Double-declining depreciation rate = Straight line depreciation rate * 2 = 20% * 2 = 40%

The 40% double-declining depreciation rate is what is employed in part 1 of the attached excel file table.

Note:

Although this is not part of the question but it will be useful for you in the future. The depreciation expenses for year 2022 is calculated by deducting the residual value of $4,000 from the 2022 Beginning depreciable amount (i.e. $5,184 - $4,000 = $1,184). The residual value of $4,000 therefore represents the book value at the end of year 2022.

(2) the sum-of-year digits

Note: See part 2 of the attached excel file for the computation of depreciation for 2018 and 2019 and the book value of the spooler at December 31, 2018 and 2019 using the sum-of-year digits method.

The sum-of-year digits method can be described as a depreciation method that accelerates deprecation by assuming that an asset’s productivity falls with the passage of time.

Under the sum-of-year digits method, the remaining useful life of the asset at the beginning of the period is divided by the sum of the year's digits to obtain the deprecation rate for that period.

For this question, the Sum of year digits used in the attached excel file is calculated as follows:

SYD = Sum of year digits = 1 + 2 + 3 + 4 + 5 = 15

Download xlsx

3 0

4 years ago

2. If an accrual is for an expense, the adjusting entry debits and __________ account and credits a(n) __________ account. asset

coldgirl [10]

If an accrual is for an expense, the adjusting entry debits and asset expense account and credit a liabilty.

<h3> What is an accrued expense?</h3>

Accrued expenses are expenses that are recorded as account payable under the current liabilities section and it is recorded as an expense in the income statement of a company or individual balance sheet.

Example of accrual accounts is accounts payable and receivable, and future interest expense.

Therefore, If an accrual is for an expense, the adjusting entry debits and asset expense account and credit a liabilty.

Learn more on accrued expenses from

brainly.com/question/13450378

5 0

2 years ago

According to the invisible hand theory, efficiency is dependent on the activity of interacting in free markets

AfilCa [17]

The invisible hand theory states that the <u>wealth of nation</u> is dependent on the activity of interacting in free markets.

<h3>What is invisible hand theory?</h3>

This refers to the tendency of the market prices to direct an individuals into pursuing their own self interests into productive activities which consequently promote economic well-being of society.

Hence, the invisible hand theory states that the <u>wealth of nation</u> is dependent on the activity of interacting in free markets.

Read more about invisible hand theory

<em>brainly.com/question/3078419</em>

#SPJ11

6 0

2 years ago

Read 2 more answers

Use the principles of supply and demand to address a predetermined goal (set by the student). be clear on what the current marke

UkoKoshka [18]

Answer:

Principles of demand & supply applied to education & employment market (as crucial aspects of student goals).

Explanation:

The goal of a student could be to get in a particular college, university. It could also be to get an work experience opportunity in an organisation.

The student would have to analyse the demand and supply for the particular seats, vacancy in the institute, organisation.

In case of educational goal, demand group will be students & suppliers would be educational institutes. If demand (by students) > supply (by institutes), the price paid would be high depending upon nature of institute. For profit institute, monetary fee would be high & for non profit institute, the eligibility criterion could be very high. If demand < supply, price & or eligibility criterion would be low.

In case of work experience goals, demand group will be firms & suppliers would be employees (students). If demand (by firms) > supply (by employee students), price (wage) received by students would be higher. If supply > demand, wage would be lower.

This demand supply theory of student goals highlight : student tendencies to be in highly excess demanded (w.r.t supply) labour group, so that they can get high wages. For this they would want to acquire 'rare' academic qualifications, having excess demand. Hence, they would pay huge price in terms of time needed to attain that high eligibility competence.

Example : Students targetting high value professional course like 'Chartered Accountant', as it has high salary due to high expertise needed, & they working so hard to attain that competence (clear the difficult exams)

7 0

4 years ago

The value-added method involves taking the cost of intermediate outputs (i.e., outputs that will, in turn, be used in the produc

Brut [27]

Answer:

Value Added = Value of Output - Intermediate Consumption = Final Goods . Value

Explanation:

This can be explained with an example:

A produces flour & sells it to Grocer for Rs 100. Grocer produces Wheat & sells it to Baker for Rs 150. Baker produces bread & sells it to Consumers for Rs 200.

Value of Final Product (Used by end consumers) i.e Bread = Rs 200.

However if considering total Value Of Output including all value added at each stage = 100 + 150 + 200 = 450. This is Overestimated value of Final product Bread, because of 'Double Counting' - Grocer's wheat includes the intermediate good (good purchased for further resale/reprocessing) value of flour and Baker's bread includes value of Wheat & flour intermediate products both.

This problem can be solved by: Calculating Value Added (by subtracting intermediate consumption) at each stage & then summing it to get the Final good value.

In this case: Farmer's Value Added = VO - IC = Flour Value - 0 = 100 .

Grocer's Value Added = VO - IC = Wheat - Flour Value = 150 - 100 = 50

Baker's Value Added = VO - IC = Bread - Wheat Value = 200 - 150 = 50

Adding value added by all these 3 we get , 150 + 50 + 50 = 200 i.e equal to final good bread value 200.

8 0

3 years ago