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3 years ago

An import restriction (tariff or quota) creates a net loss in welfare for the importing nation because:___________

Business

1 answer:

Helen [10]3 years ago

5 0

Answer:

Explanation:

An import restriction as the term implies is done to limit the amount of a certain good that is imported into the country. Usually this is done to protect the domestic producers of the good in question who are not be as efficient as the country being imported from and so charge higher prices.

The people in the economy will experience a net loss in welfare because they will now be paying higher prices and as well will be transferring some of their income to their government because import restrictions like tariffs will see their costs passed on to the consumer.

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Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Smiley Corporation wholesales repair products to equipm

Masja [62]

Answer and Explanation:

The Journal entry is shown below:-

a. Cash Dr, $20,811,010

To Bonds payable $20,000,000

To Premium on Bonds payable $811,010

(Being issuance of the bond is recorded)

For recording this we debited the cash as it increased the assets and at the same time it also increased the liabilities so the bond payable and premium is credited

b. Interest expenses Dr, $818,899

Premium on Bonds payable $81,101 ($811,010 ÷ 5 × 6 ÷ 12 )

To Cash $900,000 ($20,000,000 × 9% × 6 ÷ 12)

(Being interest expense is recorded)

For recording this we debited the interest expense as it increased the expenses and credited the cash as it reduced the assets plus the remaining balance is debited to premium on bond payable

c.The contract rate of interest is higher than market rate of interest.

5 0

3 years ago

The 7 percent preferred stock of Midwest Muffler and Towing is selling for $65 per share. What is the firm's cost of preferred s

Luda [366]

Answer:

e. 10.77 percent

Explanation:

The computation of the cost of preferred stock is shown below:

Cost of preferred stock = Annual dividend paid ÷ Price of preferred stock per share

= 0.07 × $100 ÷ $65

= 10.77%

Simply we divide the annual dividend after considering the par value per share by the price of preferred stock per share so that the correct cost of preferred stock can be computed

3 0

3 years ago

Following are the average accounts receivable and net sales reported recently by two large bever age companies (dollar amounts a

Vlada [557]

Answer:

A) Accounts receivable turnover ratio = Net credit sales / Average accounts receivable

The following table shows the accounts receivable turnover ratio of MCB and ABI:

Particulars MCB ABI

Net sales $8320 $17400

Average Accounts Receivable $720 $900

Accounts Receivable Turnover rate 11.5 19.3

Day's sale outstanding = Accounts receivable / Total credit sales × 365

The following table shows the days sale outstanding of MCB and ABI:

Particulars MCB ABI

Net sales $8,320 $17,400

Average Accounts Receivable $720 $900

Day's sale outstanding 31.58 18.88

Explanation:

3 0

3 years ago

Lister Corporation has provided the following contribution format income statement. Assume that the following information is wit

g100num [7]

Answer:

(A) $420.00

Explanation:

We know that,

The net income = Sales - variable cost - fixed expense

Since, the sales units are increased by 40 units, so new sales units is 3,040 units

So, the sale per unit equals to

= Total sales ÷ number of units

= $90,000 ÷ 3,000 units

= $30

So, the new sales

= Sales units × selling price per unit

= $3,040 × $30 = $91,200

The variable cost = Sales units × variable cost per unit

where,

Variable cost per unit = Total variable cost ÷ number of units

= $58,500 ÷ 3,000 units

= $19.5

So, the new variable cost equals to

= 3,040 units × $19.5

= $59,280

And the fixed expense would remain the same

So, the net income would be equal to

= $91,200 - $59,280 - $21,-00

= $10,920

The net income given is $10,500

So, the difference equals to

= $10,920 - $10,500

= $420

7 0

3 years ago

The Sisyphean Company is considering a new project that will have an annual depreciation expense of $ 4 million. If Sisyphean's

vazorg [7]

Answer: $1.4 million

Explanation: As, in the given case we need to compute the depreciation tax shield, we will use marginal corporate tax rate instead of average corporate tax rate as it will result in additional savings to the company in the form of taxes it paid.

Thus, shield amount can be computed as follows :-

($4,000,000) * (35%) = $1,400,000

3 0

3 years ago