True because if you don’t have those things you won’t have a stable finance situation and if something goes wrong you will be in a pickle.
Answer:
I'm not sure what this question is about, but the concept of the income expenditures model and its components is the following:
In the income (or aggregate) expenditures model, its author (Keynes) established certain assumptions in order to analyze how the economy works as a whole. His assumptions included that investment, government spending and net exports were all independent from income level.
When the economy is at equilibrium, total expenditures (GDP) = income level = consumption + government + investment + net exports
Another important assumptions are:
- marginal propensity to consume (MPC) + marginal propensity to save (MPS) = 1
- consumption = autonomous consumption + [MPC x (total income level - taxes)]
Savings = investment increase when disposable income increases or real GDP increases.
This model is used to explain the relationship between labor and production levels, and how they are affected by the economy's total expenditures. By increasing expenditures, the demand for labor and products/services will increase.
It’s basically manipulate
One of the steps in solving this problem is this one:
As we know as shown above, the joournal entry for 2014 and 2015 will include the investment balance, increases and decreases to equity and intra-entity profits realized and deferred. Also the balance of the acquisition needs to be calculated.
Calculation of the book value of the purchase made as the book value of Company K times percent purchased:
400,000 * 0.40 = 160,000
Then, calculate the difference in the acquisition and the book value of the purchase:
210,000 - 160,000 = 50,000
