A feature of monopoly that leads to unfavorable consequences is that it:

You can spend $100 on either a new economics textbook or a new CD player. If you choose to buy the new economics textbook, the o

Fed [463]

Answer: Option (B) is correct.

Explanation:

Given that,

Cost of new economics textbook = $100

Cost of new CD player = $100

Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.

If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.

As the cost of both the products are identical, so the opportunity cost of buying new economics textbook is the enjoyment of the new CD player.

4 0

3 years ago

The income statement is reconstructed on a cash basis from top to bottom when the ________ method is used to prepare the operati

Elodia [21]

Answer:

Direct method

Explanation:

There are three types of activities in the cash flow statement under the direct method

1. Operating activities: It records those transactions which are related to the cash receipts and cash payments.

Like:

Cash flow from Operating activities

Collections from customers

Less: Cash paid to suppliers and employees

Less: Interest and taxes paid

Net Cash flow from Operating activities

2. Investing activities: It records those activities which include purchase and sale of the long term assets

3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.

4 0

3 years ago

Ellie and Linda are equal owners in Otter Enterprises, a calendar year business. During the current year, Otter Enterprises has

ivolga24 [154]

Answer:

a and b

At the level of entity, otter pays no taxes either on the capital gains or on the business income.

Members will pay taxes on the capital gains and on business income.

c

The distribution of $25,000 each will be taxable in the hands of members as it is a dividend income.

Business Income and Capital gain of entity will have no impact for Linda and Ellie on their income tax returns.

Explanation:

a A partnership and b. An S corporation

At the level of entity, otter pays no taxes either on the capital gains or on the business income.

Members will pay taxes on the capital gains and on business income.

Taxable income of each member:

Ellie

Business Income is $55,000

Capital Gain is $7,500

Linda

Business Income is $55,000

Capital Gain is $7,500

Business Income = Gross Income - Operating expense

= $320,000 - $210,000

= $110,000

Note: Distribution of $25,000 will have no impact, as it only decrease their basis in the firm or company.

c. A C corporation

Ottor pays for the business income which amounts to $110,000 as well as the Capital gain of $15,000 at the applicable tax rates.

Members pays taxes only when they receive the distribution which is dividends.

The distribution of $25,000 each will be taxable in the hands of members as it is a dividend income.

Business Income and Capital gain of entity will have no impact for Linda and Ellie on their income tax returns.

7 0

3 years ago

A__________produces finished-goods inventory in advance of customer demand using a forecast of sales.

Korolek [52]

Answer:

Push system.

Explanation:

A push system produces finished-goods inventory in advance of customer demand using a forecast of sales and as such it is categorized as a make to stock because the production of goods are not based on actual demand by the consumers.

Under a push system, manufacturing is strictly based on a projected production plan and the flow of information between the manufacturer and the market is in the same direction with those of raw materials used.

5 0

3 years ago

ABC began a defined benefit pension plan for its employees on Jan 1, 2018. The following data are provided for 2018 as of Dec 31

SVETLANKA909090 [29]

Answer: $187 ⇒ Amount should ABC report as a net pension liability (asset) at Dec 31, 2018

Explanation:

Given that,

Data for 2018 as of Dec 31, 2018 are as follows:

Projected benefit obligation = $634

Accumulated benefit obligation = $418.44

Plan assets at fair value = $821

Pension expense = $192.48

Employer's cash contribution (end of year) = $361

The amount should company report as a net pension liability at Dec 31, 2018 as follows:

Net Pension Liability = Projected benefit obligation - Plan assets at fair value

= $634 - $821

= $187 ⇒ Amount should ABC report as a net pension liability (asset) at Dec 31, 2018

6 0

3 years ago