Answer and explanation:
a)
This investment tax credit will lead to a surge in the investment demand, because of the benefits that the firms receive from the investment tax credit. More and more firms will undertake investments leading to an increase causing the IS curve to shift to the right.
<em>This implies that the output and GDP will increase in the short run. </em>
(check image file 1 attached)
b)
The increase in the demand for US goods will lead to an increase in the capital inflow for the country, the exports will increase, and the IS curve will shift to the right.
<em>This implies that the output and GDP will increase in the short run</em>
(check the attached image file 2)
c)
US consumers' infatuation with goods and services from New Zealand is going to increase the imports of the country. While it may also reduce the domestic consumption spending. This, however, will affect the country by shifting its IS curve to the left.
<em>This implies that the output and GDP will decrease in the short ran. </em>
(check image file 3)
d)
Though the prices of the houses will fall sharply, increasing the affordability of the houses but the confidence of the people in real estate will be shaken. This would lead to a fall in the housing investment. This fall in investment will shift the IS curve to the left.
<em>This implies that the output and GDP will decrease in the short run.</em>
check image file 4
Answer:
As long as Mitch acted in good faith and tried to make the best possible decision regarding all available information, and his decision was something that any other person could have made, his mistake has to be considered a bad or negative business judgement (business judgement rule). He thought that his actions would benefit the corporation, but he was wrong and the corporation lost money. That types of mistakes are considered normal and just that, mistakes that anyone can make.
In regards with the second issue, that Mitch is a shareholder and a director of a firm that will directly compete with Numero Uno, he must inform the board about this and resign to either Numero Uno or One of a Kind.
Answer:
Transaction Assets Liabilities Stockholders' Equity
Issue common stock Increase NE Increase
Issue preferred stock Increase NE Increase Purchase treasury stock Decrease NE Decrease
Sale of treasury stock Increase NE Increase Declare cash dividend NE Increase NE
Pay cash dividend Decrease Decrease NE
100% stock dividend NE NE NE
2-for-1 stock split NE NE NE
When shares are sold or issued, they increase the stockholders equity as people buy these shares. They also increase assets because cash comes into the company when the shares are sold. This is why the Issuing of preference and common stock as well as the sale of Treasury shares had the same effects.
When cash dividends are declared, they become a liability that is owed to equity holders.
When these dividends are then paid, they remove the liability but reduce assets as cash is used to pay the dividends.
100% stock dividend reduces retained earnings but increases equity so stockholders equity does not change.
Answer:
$44,000
Explanation:
According to the scenario, computation of the given data are as follow:-
Depreciation on Sold Equipment
Particular Amount($)
Year 1-Accumulated depreciation 550,000
Year 2-Depreciation 50,000
Year 2 –Total accumulated depreciation 600,000
Less-Year 2-Reported depreciation 468,000
Depreciation on sold equipment 132,000
Received Cash from the Sale of Equipment
Particular Amount($)
Cost of equipment 170,000
Less-Depreciation on sold equipment 132,000
Written down value of equipment 38,000
Add-Profit on sale of equipment 6,000
Sale price of equipment 44,000
Explanation:
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