It's hard to ponder your own particular demise, however as a sole proprietor, it is vital to comprehend what happens to your business when you kick the bucket. As a sole proprietor, your business stops to exist when you kick the bucket. Your business' benefits and liabilities turn out to be a piece of your home.
Answer:
a. Reversal entry:
Debit Rent expense $4,650
Credit Miscellaneous Expense $4,650
Correct Entry:
Debit Rent expense $4,650
Credit Cash $4,650
b. Reversal entry:
Debit Accounts payable $3,700
Credit Cash $3,700
Correct Entry
Debit Cash $3,700
Credit Accounts Receivable $3,700
Explanation:
Reverse entry is to simply close to zero the original entry that has been made in mistake. Afterwards, record the correct entry to properly account the transaction.
To reverse the previously made entry, we simply debit what is credited and debit what is credited.
a. We need to close the rent expense credited by debiting it and credit the miscellaneous expense that is previously debited to zereod out the mistake recording. Then to record the correct entry, Debit Rent expense and Credit Cash at the amount $4,650
b. Just ike what we did on the previous transaction, we will debit the Accounts payable and credit the cash that has been recorded by mistake to zereod out the balance and then make the correct entry. Debit Cash $3,700 and credit Accounts receivable $3,700.
Answer:
prices to fall according to the classical economists and unemployment to increase according to Keynes.
Explanation:
The classical economists believes that a decrease in aggregate demand for goods produced would being about fall in the prices of such goods. What this implies is that as more goods are produced, if such production is not backed by corresponding demand by consumers, the prices of such goods produced will eventually fall because supply is greater than demand.
For the Keynes, their argument is that a decrease in aggregate demand will cause unemployment to increase. This is because owners of businesses or employers would lay off their employees when goods produced exceeds the demand for such production by consumers. Here, owners of businesses pays their employees through sales of goods produced. So, when the goods produced are not purchased, then there will be excess availability of such goods; hence no sale or profit, from which salaries would be paid. The next step is to start laying off employees because employers cannot cover their running costs.
Solution:
PV = FV x 
(App. B: 10%, 2 periods)
= $6,000 x 0.826 - $4,956
PV = FV x (App. B: 10%, 3 periods)
= $8,000 x 0.751 = $6,008
PV = FV x (App. B: 10%, 4 periods)
= $10,000 x 0.683 = $6,830
Net Value of Payments = ($4,956) + ($6,008) + $6,830 = ($4,134)
