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3 years ago

Explain where in the U.S. balance of payments an entry would be recorded for each of the following:

Business

1 answer:

aleksandrvk [35]3 years ago

3 0

Answer:

a. This a capital inflow and it will be recorded in the capital account in the BOP in the BOP.

b. This is an imports of merchandise and it will be recorded under current account in the BOP.

c. This is also an import of merchandise and it will be recorded under current in the BOP.

d. This is an exports of merchandise and it will be recorded under current in the BOP.

e. This an outflow of capital and it will be recorded under capital accounts in the BOP.

f. This is a purchase or import of service and it will be recorded under current account in BOP.

g. This is a sale or export of service and it will be recorded under current account in the BOP.

Explanation:

Balance of Payment (BOP) refers to the statement in which every monetary transactions made between residents of a country and the rest of the world during a specific period are recorded.

Balance of payments records the inflows and outflows of capital which monitors under capital account, imports and exports of merchandise and service which are monitor under current account, and financial transactions.

Therefore, we have:

a. A Hong Kong financier buys some U.S. corporate stock.

This a capital inflow and it will be recorded in the capital account in the BOP in the BOP.

b. A U.S. tourist in Paris buys some perfume to take home.

This is an imports of merchandise and it will be recorded under current account in the BOP.

c. A Japanese company sells machinery to a pineapple company in Hawaii.

This is also an import of merchandise and it will be recorded under current in the BOP.

d. U.S. farmers make a gift of food to starving children in Ethiopia

This is an exports of merchandise and it will be recorded under current in the BOP.

e. The U.S. Treasury sells a bond to a Saudi Arabian prince.

This an outflow of capital and it will be recorded under capital accounts in the BOP.

f. A U.S. tourist flies to France on Air France.

This is a purchase or import of service and it will be recorded under current account in BOP.

g. A U.S. company sells insurance to a foreign firm.

This is a sale or export of service and it will be recorded under current account in the BOP.

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Explain the importance of excellent customer service.

IRISSAK [1]

Excellent customer service is very important because if they treat the customers badly then their company’s customers will slowly decrease

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2 years ago

Which of the following is an example of economic investment?

otez555 [7]

Answer:

Nike buys a new machine that increases shoe production.

Explanation:

An economic investment is when you pay for new additions to the capital stock or new replacements for capital stock that has worn out.

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Addition to capital stock means an increase in buildings, plants equipments and inventories over the amount of goods and services that existed.

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3 years ago

Which one of the following is an argument in favor of a low dividend policy? Few, if any, positive net present value projects ar

g100num [7]

Answer: The tax on capital gains is deferred until the gain is realized

Explanation:

The TAX DIFFERENTIAL VIEW of DIVIDEND POLICY is a notion that states that shareholders generally prefer capital gains fo dividend payouts because capital gains are taxed at a lower rate than dividend payouts.

Therefore they would like to pay less tax on dividends and instead wait until they make a capital gain as the taxes on that are less and are only charged after the gain is realized.

This translates to less dividends being paid by companies that follow this logic therefore the 4th option is correct.

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3 years ago

Performed services for $25,000 cash. Purchased land for $6,000 cash. Hired an accountant to keep the books. Received $50,000 cas

Maurinko [17]

Answer:

1. Operating Activities (OA)

2. Investing Activities (IA)

3. Not Applicable (NA)

4. Financing Activities (FA)

5. Financing Activities (FA)

6. Operating Activities (OA)

7.Investing Activities (IA)

8. Financing Activities (FA)

9. Operating Activities (OA)

10. Financing Activities (FA)

b. Ending Cash Balance $60,200

Explanation:

a. To Indicate how each of the events would be classified on the statement of cash flows as OPERATING ACTIVITIES (OA), INVESTING ACTIVITIES (IA), FINANCING ACTIVITIES (FA), or NOT APPLICABLE (NA).

1. Based on the information it these transaction will be classified as OPERATING ACTIVITIES (OA)

2. Based on the information it these transaction will be classified as INVESTING ACTIVITIES (IA)

3.Based on the information it these transaction will be classified as NOT APPLICABLE (NA)

4. Based on the information it these transaction will be classified as FINANCING ACTIVITIES (FA)

5. Based on the information it these transaction will be classified as FINANCING ACTIVITIES (FA)

6. Based on the information it these transaction will be classified as OPERATING ACTIVITIES (OA)

7. Based on the information it these transaction will be classified as INVESTING ACTIVITIES (IA)

8. Based on the information it these transaction will be classified as FINANCING ACTIVITIES (FA)

9. Based on the information it these transaction will be classified as OPERATING ACTIVITIES (OA)

10. Based on the information it these transaction will be classified as FINANCING ACTIVITIES (FA)

b. Preparation of a statement of cash flows for 2018. Assume All-Star Automotive Company had a beginning cash balance of $9,000 on January 1, 2018.

STATEMENT OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES:

Cash receipts from revenue: $25,000

Less Cash payment for salary expense ($14,000)

Less Cash payments for utilities expense ($2,800)

Net cash flow from operating activities $8,200

CASH FLOWS FROM INVESTING ACTIVITIES:

Cash from the sale of land $9,000

Less Cash paid to purchase land ($6,000)

Net cash flow from investing activities $3,000

CASH FLOWS FROM FINANCING ACTIVITIES:

Cash receipts from stock issue $50,000

Add Cash receipts from loan $5,000

Less Cash payment on loan ($10,000)

Less Cash payments for dividends ($5,000)

Net cash flow from financing activities $40,000

Net increase in cash $51,200

($4,200+$3,000+$40,000)

Add Beginning cash balance $9,000

ENDING CASH BALANCE $60,200

Therefore the statement of cash flows for 2018 Ending Cash Balance is $60,200

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3 years ago

In the Basic Solow Model without exogenous growth, if the population, and therefore the labor supply, doubles:_______

otez555 [7]

Answer:

In the Basic Solow Model without exogenous growth, if the population, and therefore the labor supply, doubles <u>steady state output per worker will be unchanged.</u>

Explanation:

According to the given scenario options A, B and C are ruled out. Hence, the answer to the above question is option D. Steady state output per worker will be unchanged.

Hope this helps.

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2 years ago