Answer: 1. D. Economic entity
2. C. Circumstances prevent the exercise of control.
3. B. Consolidation used for both Sell and Vane.
4. B. In form, the companies are separate; in substance, they are one entity
Explanation:
1. When a parent–subsidiary relationship exists, it can be infered that consolidated financial statements will be prepared in recognition of the accounting concept of economic entity.
2. Consolidated financial statements are prepared when one company has a controlling interest in another unless the circumstances prevent the exercise of control.
3. Based on the information given, in Penn’s consolidated financial statements, it should be noted that Sell and Vane should be consolidated. Therefore, the correct option is B.
4. The best theoretical justification for consolidated financial statements is that in form, the companies are separate while in substance, they are regarded as one entity.
TRUE
If the society wishes to reduce overall pollution by certain amount, it is efficient to have firms with highest profit bearing the largest burden of reducing pollution and firms with lowest profit bearing the least burden. This is because it will not lead to overall burden on the small firms. If large firms and small firms were to reduce the pollution burden on same rate then it will be very costly for the smaller firms to bear that and it will be a burden of cost on smaller firms.
Answer:
The correct answer is letter "E": all final goods and services produced within a country's borders in a year minus capital consumption allowance.
Explanation:
Net Domestic Product (NDP) is calculated by subtracting depreciation from the Gross Domestic Product (GDP). In other words, NDP measures a country's domestic production during a period minus Capital Consumption Allowance (CCA). When the NDP increases indicate the economy of a country is safe but if it decreases it implies the economy is failing.
These are the choices I found on the internet:
A. C corporations are generally not subject to corporate income tax.
B. C corporations are separate entities for tax purposes.
C. Shareholders of a C corporation have limited liability.
D. Shareholders of a C corporation are taxed only when the corporation distributes earnings and profits.
The false one would be letter A - C corporations are generally not subject to corporate income tax.
C corporations are subject to tax and may be taxed at a tax rate from 15 to 38 percent.
Answer:
equilibrium level of output should increase by $80 million
Explanation:
The concept of multiplier is used to explain how an increase or decrease in the money available in the economy changes economic output. In this case you have to multiply the increase in government spending by 4 = $20 million x 4 = $80 million.
Money doesn't stand still, imagine the government gives you $100, and unless you bury it in the ground, those $100 will multiply and in this case convert to $400. The idea is not that complicated, since once you receive the money, you will spend some part of it (or all) and you will save the remaining part. Let's say you buy groceries at the supermarket and spend $75, and save $25. The owner of the supermarket (the corporation or individual) will use $60 of your $75 to pay for dairy products that were purchased before. The rest will be kept in the bank. The seller of the dairy products will in turn use a part of the $60 received to pay for gas. And then it will be turn of the gas station, its employees, etc.
