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yawa3891 [41]
3 years ago
10

Explain how money (increased commerce) spent by tourists in the Macro Islands moves through the economy's circular flow diagram.

Make sure that each market and the government are included in your explanation.
Business
1 answer:
ella [17]3 years ago
4 0
<span> #1) Explain how money (increased commerce) spent by tourists in the Macro Islands moves through the economy's circular flow diagram.

Answer: Increased commerce spent by tourists in the Macro Islands moves through the economy’s circular flow diagram and will affect all portions of the Macro Island’s economy. First, the tourists that visit the Macro Islands will purchase goods from the product market, as a result it will form the product market. These purchased goods then go to the household where these goods will be used; this supports the product market. Here, the system branches off into three different directions: first, through the payment of taxes we reap government services; second, by investing our money in financial institutions, we sustain the financial market while collecting interest; third, because households provide resources like labor, we sustain the factor market and in return collect income. These three sections of the economy connect to businesses through government services, borrowing, and factors of production respectively. In the end the businesses provides foods and services to the product market to repeat this cycle.

<span>I hope it helps, Regards. </span></span>
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Otis Thorpe Corporation has 10,000 shares of $100 par value, 8% preferred stock and 50,000 shares of $10 par value common stock
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Answer:

(a) Cumulative dividend is not reported in Balance sheet.

The dividends in arrears on December 31, 2014 is $240,000

(b) Preferred Stock (Dr.) $400,000

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Explanation:

a. Cumulative dividends on Preferred stocks are not declared and therefore they are not reported in Balance sheet of a company.

To calculate the dividends in arrears on December 31, 2014,

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b. Preferred stock conversion into common stock is recorded as common stock account in balance sheet.

Preferred stock conversion amount is 4,000 shares * $100 par value = $400,000. This is presented as debit entry.

The credit entry will be common stock account with $ 280,000 (4,000 * 7 shares conversion * $10 par value).

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c. When preferred stock is issued cash is increased so debit account will be cash (10,000 shares * $107 per share) and credit entry will be Preferred Stock account in balance sheet at par value (10,000 shares * $100 par value). The remaining is credited in paid in capital of preferred stock account  [10,000 shares * $7 ($107 - $100) per share].

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