The journal entry required to close the Drawing account is debit to Income Summary account and a credit to Drawing account.
Option a) is correct.
<h2>What is Income Summary account ?</h2>
An income summary is a temporary account that is used to net the closing entries from all the revenue and expense accounts at the conclusion of the accounting quarter. The final balance is regarded as a gain or loss. The company made a profit for that year if the net balance of the income summary is a credit balance, and a loss for that year if the net balance is a debit balance.
It lists all earnings and costs related to both operational and non-operating operations. It is also known as a revenue and expense summary as a result.
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Answer:
Explanation:
first will need to calculate the Fv future value of this CD
Fv = Pv ( 1 + R )^n n = 4 /12 = 0.333333, r, rate = 4.5/100 = 0.045
Fv = $ 630000 ( 1+ 0.045)^0.33333 = $ 639311.69
a) the current value at 5 % Pv = Fv / ( 1+r)ⁿ
Pv = $ 639311.69 / ( 1.05)^0.3333 = $ 628998.41
b) the current price at 4.25% = $ 639311.69 / ( 1.0425)^0.3333 = $ 630503.20
Answer:
$112,500
Explanation:
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life)
Depreciation expense in year 1 = 2/4 x $450,000 = $225,000
Book value at the beginning of year 2 = $450,000 - $225,000 = $225,000
Depreciation expense in year 2 = 2/4 x $225,000 = $112,500
When the current output is more than the potential output the fed is likely to enact decreasing reserves to increase interest rates.
The reason why they would have to do this is based on the fact that when the actual output in the economy is more than the potential output, It means that there is an inflationary gap.
In order to close this gap, the fed would have to reduce the aggregate demand, thereby raising the rate of interest. This would in turn lead to the fall in consumption and fall in saving.
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It should be noted that a benefit of contributing to a retirement account is A. The amount of income that's taxable is reduced.
<h3>What is the benefit of retirement account?</h3>
It should be noted that employee contribution can help in reducing taxable income.
Contributions and investment gains won't be taxed until they're distributed.
Therefore, the benefit of contributing to a retirement account is the amount of income that's taxable is reduced.
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