Cash flow hedge of a foreign currency receivable, the journal entries for the sale
A-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency receivable, the journal entries for the sale and foreign currency forward contract in U. S. Dollars will be:
Journal entries for December 1, 2020, sale of parts:
Debit Accounts Receivable:
$6,250
Credit Sales:
$6,250
Journal entries for December 1, 2020, foreign currency forward contract:
Debit Cash:
$1,290
Credit Unrealized gain or loss (OCI):
$1,290 ($6,450/5 months)
A-2. The impact on 2020 net income will be $0 because the unrealized gain or loss on the forward contract is recognized in OCI.
A-3. The impact on 2021 net income will be:
Debit Cash:
$6,450
Credit Realized gain or loss:
$1,290 ($6,450/5 months * 1 month)
Credit Foreign exchange gain:
$5,160 ($30,000 * (5.05 - 4.875))
A-4. The impact on net income over the two accounting periods will be a gain of $5,160 (credit foreign exchange gain in 2021).
B-1. Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency receivable, the journal entries for the sale and foreign currency forward contract in U. S. Dollars will be:
Journal entries for December 1, 2020, sale of parts:
Debit Accounts Receivable:
$6,250
Credit Sales:
$6,250
Journal entries for December 1, 2020, foreign currency forward contract:
Debit Cash:
$1,290
Credit Unrealized gain or loss:
$1,290 ($6,450/5 months)
Journal entries for December 31, 2020, adjustment to fair value of forward contract:
Debit Unrealized gain or loss:
$610 ($1,500 - $1,290)
Credit Foreign exchange gain:
$610Journal entries for March 1, 2021, settlement of forward contract:
Debit Cash:
$4,875
Credit Unrealized gain or loss:
$1,500
Credit Foreign exchange gain:
$3,375 ($30,000 * (5.05 - 5))
B-2. The impact on 2020 net income will be a gain of $610 (credit foreign exchange gain on December 31, 2020).
B-3. The impact on 2021 net income will be a gain of $3,375 (credit foreign exchange gain on March 1, 2021).
B-4. The impact on net income over the two accounting periods will be a gain of $3,985 (credit foreign exchange gain in 2020 and 2021).
Learn more about foreign currency from the given link
https://brainly.com/question/6675565
#SPJ11
Income Method. Nancy is a widow with two teenage children. Nancy's gross income is $ per month, and taxes take about % of her income. Using the income method, Nancy calculates she will need to purchase about eight times her disposable income in life insurance to meet her needs. How much insurance should Nancy purchase?
Income Method. Nancy is a widow with two teenage children. Nancy's gross income is $ per month, and taxes take about % of her income.
To determine the amount of insurance Nancy should purchase using the income method, we need to consider her gross income, taxes, and the recommended multiple of disposable income. First, let's calculate Nancy's disposable income. Disposable income is the amount of income remaining after taxes are deducted. We can calculate this by subtracting the percentage of income taken by taxes from Nancy's gross income:
Disposable Income = Gross Income - (Percentage of Income for Taxes * Gross Income)
Next, we need to calculate the recommended amount of insurance based on Nancy's disposable income. The income method suggests purchasing a certain multiple of disposable income as life insurance coverage. In this case, the recommended multiple is eight times disposable income:
Insurance Coverage = Recommended Multiple * Disposable Income
By multiplying the recommended multiple by Nancy's disposable income, we can determine the amount of insurance she should purchase.
It's important to note that the specific values for Nancy's gross income and the percentage of income taken by taxes are missing from the question. Without those values, we cannot provide an exact calculation. However, if we have those values, we can substitute them into the formulas mentioned above to determine the appropriate amount of insurance for Nancy.
Learn more about insurance here:
https://brainly.com/question/32233665
#SPJ11
MuffinMegabucksisconsideringtwodifferentsavingsplans.Thefirstplanwouldhaveher deposit $500 every six months, and she would receive interest at a 7 percent annual rate, compounded semiannually. Under the second plan she would deposit $1,000 every year with a rate of interest of 7.5 percent, compounded annually. The initial deposit with
Plan 1 would be made six months from now and, with Plan 2, one year hence.
a. What is the future (terminal) value of the first plan at the end of 10 years?
b. What is the future (terminal) value of the second plan at the end of 10 years? c.WhichplanshouldMuffinuse,assumingthatheronlyconcerniswiththevalueofher savings at the end of 10 years?
d. Would your answer change if the rate of interest on the second plan were 7 percent?
a. The future value of the first plan at the end of 10 years can be calculated using the formula for compound interest:
Future Value = P * ((1 + r/n)^(n*t) - 1) / (r/n)
Where:
P = Deposit amount per period
r = Annual interest rate (as a decimal)
n = Number of compounding periods per year
t = Number of years In this case, P = $500, r = 7% or 0.07, n = 2 (semiannual compounding), and t = 10. Plugging in the values, we have: Future Value = $500 * ((1 + 0.07/2)^(2*10) - 1) / (0.07/2) Calculating this, the future value of the first plan at the end of 10 years is approximately $10,103.50. b. Similarly, to calculate the future value of the second plan at the end of 10 years, we can use the same formula but with different values for P, r, n, and t. In this case, P = $1,000, r = 7.5% or 0.075, n = 1 (annual compounding), and t = 10. Future Value = $1,000 * ((1 + 0.075)^10 - 1) / 0.075 Calculating this, the future value of the second plan at the end of 10 years is approximately $15,393.59. c. Based on the future values calculated above, the second plan with an annual deposit of $1,000 and an interest rate of 7.5% compounded annually would result in a higher future value of $15,393.59 compared to the first plan's future value of $10,103.50. Therefore, Muffin should use the second plan if her only concern is the value of her savings at the end of 10 years. d. If the interest rate on the second plan were 7 percent instead of 7.5 percent, the future value of the second plan would be different.
Learn more about future value here:
https://brainly.com/question/30787954?
#SPJ11
The internal rate of return may be defined as:
a. the discount rate that makes the NPV equal to zero.
b. the difference between the market rate of interest and the NPV.
c. the market rate of interest less the risk-free rate.
d. the project acceptance rate set by management.
e. None of the above
The internal rate of return may be defined as the discount rate that makes the net present value (NPV) equal to zero. Here option A is the correct answer.
The internal rate of return (IRR) is the interest rate that makes the net present value of all cash flows (both positive and negative) from a project equal to zero.
The IRR is a popular measure of investment efficiency and profitability. The internal rate of return is typically used to estimate the profitability of potential investments.
A project with an IRR that is higher than the required rate of return is considered to be a good investment, while a project with an IRR that is lower than the required rate of return is considered to be a bad investment. Answer: a. the discount rate that makes the NPV equal to zero.
To learn more about net present value
https://brainly.com/question/13228231
#SPJ11
Suppose in a country you're given the following information:
- the number unemployed is 87
- the total population is 1,555
- the number employed is 920
- the number of discouraged workers is 59.
The unemployment rate is equal to _____ **You must report your answer as a whole number - do not include a decimal. For example, 15 or 268 or -173. If you do not report it in this way, it may be marked as incorrect. Note on rounding: 0.5 or higher rounds up; everything else rounds down." Your Answer:
We round the unemployment rate down to the nearest whole number. Therefore, the unemployment rate is 8
The unemployment rate can be calculated by dividing the number of unemployed individuals by the labor force, which is the sum of the number employed and the number unemployed.
In this case, the number of unemployed is given as 87, and the number employed is 920. Therefore, the labor force is:
Labor Force = Number Employed + Number Unemployed = 920 + 87 = 1,007.
To calculate the unemployment rate, we divide the number of unemployed by the labor force and multiply by 100 to express it as a percentage:
Unemployment Rate = (Number Unemployed / Labor Force) * 100 = (87 / 1,007) * 100 ≈ 8.63.
Since we are instructed to provide the answer as a whole number without a decimal, we round the unemployment rate down to the nearest whole number. Therefore, the unemployment rate is 8.
learn more about unemployment here:
brainly.com/question/14227610
#SPJ11
Imagine that you are considering a job at Allstate. Based on the information presented in the video, do you believe it would be a good fit? Why or why not?
Based on the information presented in the video, it is not possible to determine whether a job at Allstate would be a good fit or not without more specific details about the individual's skills, interests, and career goals.
The video may provide insights into Allstate's company culture, values, and some aspects of the job, but it lacks specific information about the job responsibilities, work environment, and career advancement opportunities. To determine whether a job at Allstate would be a good fit, one would need to consider factors such as their qualifications, experience, and personal preferences, as well as how well these align with the specific requirements and culture of the company.
Additionally, individual preferences and career goals play a significant role in determining whether a job is a good fit. Factors such as work-life balance, growth opportunities, compensation, and benefits are important considerations that can vary from person to person. It is crucial to thoroughly research and evaluate the job description, company culture, and overall fit with one's professional aspirations before making a decision about pursuing a job at Allstate or any other organization.
Learn more about Allstate here:
https://brainly.com/question/13673168
#SPJ11
_____is a situational approach to leadership that emphasizes the participative dimension of leadership: how leaders go about making decisions.a. The Vroom model.b. The leadership substitution theory.c. Fiedler's contingency model of leadership effectiveness.d. Hersey and Blanchard's model.e. The path-goal theory.
The situational approach to leadership that emphasizes the participative dimension of leadership is known as Hersey and Blanchard's model. Here option D is the correct answer.
This approach focuses on the maturity level of the followers and their readiness to accomplish a particular task. This model comprises four leadership styles that are displayed by the leader depending on the follower's readiness level. These styles include directing, coaching, supporting, and delegating.
Hersey and Blanchard's model proposes that leader needs to adjust their leadership style depending on the readiness level of their followers. This readiness level is measured in terms of ability, skills, and willingness to perform the assigned task.
By matching the leadership style with the follower's readiness level, a leader can boost their performance and help them achieve the desired goal. Therefore, the correct option is d. Hersey and Blanchard's model.
To learn more about leadership
https://brainly.com/question/1232764
#SPJ11
Jamal wishes to invest an unknown sum in an account where interest is compounded continuously. Assuming that Jamal makes no additional deposits or withdrawals, what annual interest rate will allow his initial investment to double in exactly five years
Let the initial sum invested by Jamal be P. We can calculate the interest rate needed for doubling the sum P at a continuous compounding by using the cost formula shown below.
A = Pe^(rt), where A is the final amount, P is the principal amount, r is the interest rate, t is the time in years, and e is a mathematical constant equal to 2.71828.
.When Jamal invests an amount P, the final amount that he will get after five years will be equal to 2P. Therefore ,A
= 2P, P
= P, r = r, and t
= 5 years.A = Pe^(rt)2P
= Pe^(5r)2 = e^(5r)ln 2
= 5rln eln 2 / 5 = rln 2r
= (ln 2 / 5)≈ 0.13863 or 13.863%. Therefore, an annual interest rate of about 13.863% will allow Jamal's initial investment to double in exactly five years when compounded continuously.
To know more about Cost visit:
https://brainly.com/question/23161312
#SPJ11
The Bureau of Labor Statistics (BLS) reports unemployment rate numbers each month. Their preliminary reports for February of 2017 said that over 200,000 jobs had been added and the unemployment rate had dropped to 4.7%. What does this report signal about the economy
The preliminary report from the Bureau of Labor Statistics (BLS) for February 2017, stating that over 200,000 jobs were added and the unemployment rate dropped to 4.7%, suggests a positive signal for the economy.
The report indicates that the economy is experiencing job growth and a decrease in the unemployment rate. Adding over 200,000 jobs in a single month is a significant increase in employment opportunities, which suggests a growing and robust job market. When more people are employed, it generally indicates increased consumer spending, higher levels of economic activity, and potentially improved business conditions.
Furthermore, the drop in the unemployment rate to 4.7% signifies that a smaller proportion of the labor force is without a job. A declining unemployment rate suggests that individuals are finding employment and that the overall economy is creating enough jobs to accommodate a significant portion of the workforce. A lower unemployment rate is generally seen as a positive sign for the economy, as it reflects a higher level of employment and economic stability.
Learn more about economy here: https://brainly.com/question/32230214
#SPJ11
The following information pertains to the Frameworks Corporation for May. Calculate the cost of goods sold for the period:
Beginning Finished Goods Inventory $19,500
Ending Finished Goods Inventory$18,000
Cost of Goods Manufactured $126,800
A. $126,800.
B. $125,300.
C. $146,300.
D. $128,300.
E. $164,300.
The cost of goods sold for the period is $125,300. This can be calculated by taking the cost of goods manufactured and adjusting for the change in finished goods inventory.
The beginning finished goods inventory is subtracted from the cost of goods manufactured, and the ending finished goods inventory is added. In this case, the cost of goods manufactured is $126,800, the beginning finished goods inventory is $19,500, and the ending finished goods inventory is $18,000. By subtracting the beginning inventory and adding the ending inventory, we get $126,800 - $19,500 + $18,000 = $125,300.
To calculate the cost of goods sold, we start with the cost of goods manufactured, which is given as $126,800. Then, we need to adjust for the change in finished goods inventory.
To calculate the change in finished goods inventory, we subtract the ending finished goods inventory from the beginning finished goods inventory. In this case, it is $18,000 - $19,500 = -$1,500.
Next, we adjust the cost of goods manufactured by adding the change in finished goods inventory. So, $126,800 + (-$1,500) = $125,300.
Therefore, the cost of goods sold for the period is $125,300. The correct answer is B. $125,300.
To learn more about cost of goods click here : brainly.com/question/14306987
#SPJ11
Read the situation taken from the story, then, TYPE TWO conclusions that can be drawn from it. (2 pts)
Situation:
Lolito enjoys his job when the pace is leisurely but has no patience in doing tasks which use much time like sorting small items.
I will give brainliest for the people who answer it
The situation taken from the story, then, TYPE TWO conclusions that can be drawn from it. Individual preferences and job satisfaction can vary based on the pace of work and Different individuals have varying levels of patience and tolerance for tasks that require significant time investment.
Based on the given situation, two conclusions that can be drawn are:
1. Individual preferences and job satisfaction can vary based on the pace of work. Lolito enjoys his job when the pace is leisurely, suggesting that he finds satisfaction and enjoyment in a work environment that allows for a slower and more relaxed approach.
2. Different individuals have varying levels of patience and tolerance for tasks that require significant time investment. Lolito's lack of patience in sorting small items indicates that he may prefer tasks that are more time-efficient or have quicker results. This suggests that individuals may have different levels of tolerance for tasks that require attention to detail or extended periods of concentration.
Overall, these conclusions highlight the importance of understanding individual preferences and work styles in creating a conducive and satisfying work environment. Recognizing and accommodating these differences can contribute to increased job satisfaction and productivity.
Learn more about job satisfaction here:
https://brainly.com/question/28580172
#SPJ11
An engineer has conducted a year-end analysis (365 data points) of incoming materials by checking for dimensional variation. For one of the items (a ruler), the print dimension of length is to be 12.50 inches +/- 0.02 inches. The computer software indicated that the grand average was 12.52 inches and was statistically different from 12.50 inches. The engineer should do the following: a. Since the result is statistically significant, request the supplier to modify his equipment by 0.02 inches b. Follow the decision of the computer analysis, start rejecting the rulers c. The result is not of practical significance; the difference is too small to justify a change d. The supplier is to be notified via a corrective action request to correct his process
The engineer should notify the supplier via a corrective action request to correct his process if the grand average of the print dimension and length of one of the items is statistically different from the standard. Therefore, the correct option is d.
The supplier is to be notified via a corrective action request to correct his process. What is statistical significance? Statistical significance indicates how possible it is that a result occurred by chance. Statistical significance is determined using a p-value, which compares the observed data to a null hypothesis. A hypothesis is something that has not been proven. A null hypothesis is a hypothesis that is presumed to be true until proven false. In statistics, the null hypothesis is generally an observation that one would like to test. After conducting a test, the null hypothesis is either accepted or rejected. If the p-value is less than the significance level (0.05 or 0.01), the null hypothesis is rejected, and the results are considered statistically significant. How to answer the question:
For one of the items (a ruler), the print dimension of length is to be 12.50 inches +/- 0.02 inches. The computer software indicated that the grand average was 12.52 inches and was statistically different from 12.50 inches. The engineer should do the following:
a. Since the result is statistically significant, request the supplier to modify his equipment by 0.02 inches
b. Follow the decision of the computer analysis, start rejecting the rulers
c. The result is not of practical significance; the difference is too small to justify a change
d. The supplier is to be notified via a corrective action request to correct his process
Therefore, the correct option is d. The supplier is to be notified via a corrective action request to correct his process.
To know more about null hypothesis refer to:
https://brainly.com/question/29445764
#SPJ11
Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250,000 - 210p+ 5,300pc, where Qis the quantity of DVRs demanded, p is the price of a DVR, and pc is the price of cable television. How much does the quantity demanded for DVRs change if p increases by $40 (provide a positive number if it increases and a negative number if it decreases)?
the quantity demanded for DVRs will decrease by 8400 if p increases by $40.
The given demand function is Q = 250,000 - 210p+ 5,300pc
Given the change in the price of DVRs, the new price of DVRs will be p + $40
Now, substitute the value of new price (p + $40) into the demand function, Q = 250,000 - 210(p + $40) + 5,300pc
Simplify the equation, Q = 250,000 - 210p - $8,400 + 5,300pcQ = 241,600 - 210p + 5,300pc
Now, we can see that the coefficient of p is -210, which means that a $1 increase in the price of DVRs leads to a decrease in quantity demanded of 210 units. So, a $40 increase in price will lead to a decrease in quantity demanded by 8400 units.
Therefore, the quantity demanded for DVRs will decrease by 8400 if p increases by $40.
To know more about demand visit:
https://brainly.com/question/30402955
#SPJ11
Fill in the blanks to make the following statements correct. a. A perfectly competitive firm faces a _____ demand curve, whereas a single-price monopolist faces a _____ demand curve. b. A single-price monopolist that maximizes profits will produce at the output where _____ equals _____ A perfectly competitive firm (and industry) produces a level of output such that price _____ marginal cost. The monopolist produces a level of output such that price _____ marginal cost. c. A monopolist will be earning profits as long as price is _____ average total cost. d. At its profit-maximizing level of output, marginal cost for a single-price monopolist is always _____ the price it charges for its output.
In a perfectly competitive market, firms face a horizontal demand curve and produce at the output level where price equals marginal cost. However, a monopolist faces a downward-sloping demand curve and produces at the output level where marginal cost equals marginal revenue.
a. A perfectly competitive firm faces a horizontal or perfectly elastic demand curve, whereas a single-price monopolist faces a downward-sloping or negatively sloped demand curve.
b. A single-price monopolist that maximizes profits will produce at the output where marginal cost (MC) equals marginal revenue (MR). A perfectly competitive firm (and industry) produces a level of output where price equals marginal cost (P = MC). The monopolist produces a level of output where price is greater than marginal cost (P > MC).
c. A monopolist will be earning profits as long as price is greater than average total cost (P > ATC).
d. At its profit-maximizing level of output, marginal cost for a single-price monopolist is always less than the price it charges for its output (MC < P). This is because the monopolist sets its price above the marginal cost in order to maximize profits. The difference between price and marginal cost, known as the monopolist's markup, allows the monopolist to earn profits.
To know more about competitive market click here
brainly.com/question/32155282
#SPJ11
Labor market in Wakanda is standardized so that private firms hire only in two positions: Associates and Assistants. Right now Associates earn $80,000 per year and Assistants earn $50,000 per year. Every firm decides how many Associates and how many Assistants to hire or fire. Suppose right now the labor market is in equilibrium. The newly elected government of Wakanda has decided to eliminate the old labor market system. All existing workers need to be reclassified. Right now the firms will be allowed to hire and fire workers in a single category - Apprentices, with minimum wage of $60,000. Every Apprentice hired by the firm will have to be offered the same wage as to any other firm employee. What is likely will happen with the level of economic activity in Wakanda after enacting new labor market regualtion? Why?
After the new labor market regulation in Wakanda, the level of economic activity is likely to decrease. The elimination of the old labor market system and the introduction of a single category of Apprentices with a minimum wage of $60,000 may lead to reduced hiring and potentially job losses, impacting overall economic activity.
The introduction of a single category of Apprentices with a minimum wage lower than the current salaries of Associates and Assistants ($80,000 and $50,000 respectively) may result in firms reducing their hiring or even laying off existing workers. The firms may find it more cost-effective to hire Apprentices at the minimum wage of $60,000 instead of retaining higher-paid employees. As a result, the overall employment level and wage levels in the economy could decline.
With reduced hiring and potential job losses, the purchasing power of individuals may also decrease, leading to reduced consumer spending. This, in turn, can dampen demand for goods and services, negatively impacting economic activity. Additionally, the uncertainty and disruption caused by the transition from the old labor market system to the new one could further contribute to a decline in economic activity.
To learn more about labor market click here:
brainly.com/question/29998425
#SPJ11
Task #1 You have been asked by your manager to outline the process of howl:r the model should be used. He sure to address the following: I Confirmation of the problem you have been asked to solve. - Identification of how the model will be created including any associated risks. . Inputs, assumptions. and constraints associated with the model. Your response should come in the form of documentation that can be stored in your internal company records for future reference. Please be sure to explain, In detail. all three of the items listed above In your response.
Documentation outlining the process of using the model, including problem confirmation, model creation with associated risks, and inputs, assumptions, and constraints.
What are the key elements to consider when developing a marketing strategy for a new product?This task requires documenting the process for utilizing a model, including confirmation of the problem to be solved, the creation of the model and associated risks, and the inputs, assumptions, and constraints related to the model.
The documentation should be detailed and suitable for internal company records, providing a clear explanation of all three items mentioned above.
By following this outlined process, the model can be effectively utilized to solve the identified problem, providing valuable insights and aiding decision-making within the organization.
[Include any additional information or specific instructions relevant to the model or problem-solving process.]
End of Documentation
Learn more about Documentation outlining
brainly.com/question/28903268
#SPJ11
A billionaire from Australia, living in Melbourne, wishes to buy a new Lamborghini Aventador car shipped from Italy as quick as possible. His purchasing power is almost unlimited for the delivery. Which mode of transportation does it fit this context the least (to the smallest extent or degree)?
a. Shipping by an ocean sea liner.
b. Shipping by an airplane.
c. Shipping by an ocean sea-liner combined with a truck when reaching Australia continent.
d. Shipping by train.
The mode of transportation that fits the context the least (to the smallest extent or degree) for a billionaire from Australia living in Melbourne who wishes to buy a new Lamborghini Aventador car shipped from Italy as quickly as possible is shipping by train.
Option D: Shipping by train fits the context the least (to the smallest extent or degree).The shipping by train is not an option for this context because it takes a long time, as it takes more time than any other mode of transportation to cover such a vast distance between Italy and Australia, that too with the Lamborghini Aventador. Therefore, this shipping mode fits the least for this context.The other options, i.e., Shipping by an ocean sea-liner, Shipping by an airplane, and Shipping by an ocean sea-liner combined with a truck when reaching Australia continent, can be the modes of transportation for such delivery if quick delivery is needed. Among the three modes, shipping by airplane will be the fastest and the best fit for this context.
To know more about Lamborghini, visit:
https://brainly.com/question/10775708
#SPJ11
If the efficient markets hypothesis is correct, then.
If the efficient markets hypothesis is correct, then the prices of assets in the market should reflect all available information.
The efficient markets hypothesis (EMH) is a financial theory that contends that financial markets are "informationally efficient," or that asset prices in financial markets completely reflect all available information at any given time. It assumes that all investors have access to the same information and interpret it in the same way, resulting in prices that reflect all of the available information. Therefore, under the efficient markets hypothesis, an investor cannot gain an advantage over other investors since any new information would be immediately reflected in asset prices.
The efficient markets hypothesis implies that investors should not expect to gain a significant advantage over the market by trying to make investment decisions based on publicly accessible data or fundamental analysis. Instead, the hypothesis suggests that investors should invest passively by tracking market indices or mutual funds since active trading based on publicly available data is unlikely to yield superior returns. Therefore, if the efficient markets hypothesis is correct, then it would be challenging to outperform the market by active trading based on publicly available information since all information is already reflected in asset prices.
Learn more about efficient markets hypothesis:
https://brainly.com/question/29451840
#SPJ11
Why did some economists and policymakers believe that the Fed's policy actions during the 2020 recession might have increased moral hazard problems in the financial system?
A. By helping only the most established banks during the 2020 recession, the Fed incentivized them to make fewer loans in the future in order to secure aid during recessions
B. By increasing the interest rate during the 2020 recession, the Fed encouraged people to care more about saving money than improving the economy
C. The Fed once again provided relief to companies and banks who acted in a risky manner and that may encourage risky behavior by other firms who believe they will be bailed out during recessions
D. By decreasing the money supply during the 2020 recession, the Fed signaled to consumers that saving is less important than spending
Some economists and policymakers believed that the Federal Reserve's policy actions during the 2020 recession increased moral hazard problems in the financial system.
Critics argued that the Fed's assistance to companies and banks during the 2020 recession created a moral hazard problem. By providing relief to those who engaged in risky behavior, it was feared that it would encourage similar behavior in the future, as firms might expect to be bailed out during future crises.
This could lead to systemic instability and create a precedent where firms take excessive risks, knowing that they may not face full accountability for their actions. The concern was that such moral hazard could undermine the overall stability and functioning of the financial system.
To learn more about Federal click here:
brainly.com/question/2343055
#SPJ11
Sam Student had borrowed $1,000 from his cousin. Sam and the cousin became involved in a heated disagreement when the cousin began to press Sam for repayment of the loan. Finally, Sam wrote a check for $190 to the cousin and conspicuously wrote on the check in big letters that it was the full and final payment of the $1,000 loan. In need of money, the cousin cashed the check and demanded the remaining $810 from Sam. Sam refused to pay, claiming that they had entered into an accord and satisfaction that discharged Sam’s obligation to pay anything more. The cousin sued Sam.
Required:
Discuss the probable outcome
It is most likely that Sam would have to pay the remaining $810 as the accord and satisfaction was not completed in this scenario. The cousin has the right to sue Sam for the remaining amount.
In the case of Sam Student, the probable outcome is that he would have to pay the remaining $810 to the cousin even after making a payment of $190 to the cousin.
The legal doctrine of accord and satisfaction applies to this scenario. In this case, the accord is an agreement to settle a debt by paying a lesser amount than the one originally agreed upon. Sam made a payment of $190 to his cousin and conspicuously wrote on the check that it was the full and final payment of the $1,000 loan.
However, it appears that there was no satisfaction. A satisfaction is a second event in which the debtor fulfills the accord and the creditor agrees to discharge the debt. The cousin accepted the payment of $190 but demanded the remaining $810 from Sam, which indicates that there was no satisfaction.
Therefore, it is most likely that Sam would have to pay the remaining $810 as the accord and satisfaction was not completed in this scenario. The cousin has the right to sue Sam for the remaining amount.
Learn more about probable outcome
https://brainly.com/question/14867086
#SPJ11
Your 45 year old uncle is 20 years away from retirement; your 35 year old sister is about 30 years away from retirement. how might the investment policy statements differ?
The investment policy statement for the 45-year-old uncle and the 35-year-old sister may differ on the basis of their investment objectives, risk tolerance, time horizon, and return expectations.
Investment policy statements (IPS) are formal documents that specify an investor's investment goals, risk tolerance, time horizon, and asset allocation strategy. The IPS is an investment management tool that aids investors in selecting investments that are appropriate for their risk tolerance and investment objectives, as well as monitoring and modifying their investment portfolios over time.
Due to the 20-year time difference between the uncle and the sister, their investment policy statements may differ in the following ways: Investment Objectives: The uncle and sister's investment goals may differ. For example, the uncle may aim to create a retirement income stream, while the sister may aim to save for her child's education. Risk Tolerance: The uncle and sister may have different risk tolerance levels. For example, the uncle may have a low tolerance for risk because he will retire soon, while the sister may have a high tolerance for risk because she has a long-term investment horizon. Time Horizon: The uncle has a shorter investment horizon than the sister.
To learn more about Investment visit here:
brainly.com/question/15105766
#SPJ11
Question 3 1 pts Suppose that the size of the labor force in the economy is 3 million. The number of unemployed is 0.25 million. How many people are employed in this economy? 3 million 2.75 million. 0
In this economy, the number of people employed is 2.75 million.
To determine the number of people employed in the economy, we subtract the number of unemployed individuals from the labor force. In this scenario, the size of the labor force is given as 3 million, and the number of unemployed individuals is 0.25 million.
Therefore, the number of people employed can be calculated as:
Number of employed = Labor force - Number of unemployed
= 3 million - 0.25 million
= 2.75 million
Hence, there are 2.75 million people employed in this economy.
The labor force consists of individuals who are either employed or actively seeking employment. In this case, the size of the labor force is 3 million. However, the number of unemployed individuals is only 0.25 million, indicating that the majority of the labor force, i.e., 2.75 million, is employed. This suggests a relatively low unemployment rate and a higher level of employment in the economy. It is important to note that this calculation assumes that there are no individuals who are not in the labor force, such as those who are not working and not actively seeking employment, such as retirees, students, or individuals who have chosen not to participate in the labor market.
Learn more about scenario here:
https://brainly.com/question/17079514
#SPJ11
You are Julia, a new accounts receivable clerk for a paper and office supply store. Toward the end of the month, Carol Reed, a very personable sales associate, tells you that the previous A/R clerk always recorded a sales invoice when she got a verbal agreement from a customer to buy paper or office supplies. She has a verbal order from her favorite customer for $10,000 of paper and wants you to create a sales invoice today. You know that in order to create a sales invoice you need a purchase order from the customer. You also know that Ms. Reed receives a bonus for any month when her sales exceed $20,000. Would you agree to her request, and why
As a new accounts receivable clerk for a paper and office supply store, if Carol Reed, a personable sales associate, tells you that the previous A/R clerk cash sales always recorded a sales invoice when she got a verbal agreement from a customer.
To buy paper or office supplies, you should not agree to her request to create a sales invoice today because she has a verbal order from her favorite customer for $10,000 of paper. There is a need for a purchase order from the customer to create a sales invoice. A verbal order is a medical order or instructions.
For patient care that a health care professional communicates orally rather than in writing. A verbal order is a therapeutic plan made by the physician, nurse practitioner, or other health care provider that is communicated by speaking to another member of the health care team.The risk of a verbal order is that it is often difficult to prove what the medical provider said, and the possibility of misinterpretation or misunderstanding of what was intended is very real. To ensure that there is no mistake, orders should be in writing as much as possible and immediately transcribed into the medical record.
Complete question:
You are Julia, a new accounts receivable clerk for a paper and office supply store. Toward the end of the month, Carol Reed, a very personable sales associate, tells you that the previous A/R clerk always recorded a sales invoice when she got a verbal agreement from a customer to buy paper or office supplies. She has a verbal order from her favorite customer for $10,000 of paper and wants you to create a sales invoice today. You know that in order to create a sales invoice you need a purchase order from the customer. You also know that Ms. Reed receives a bonus for any month when her sales exceed $20,000. Would you agree to her request, and why?
To know more about Cash sale visit:
https://brainly.com/question/31320854
#SPJ11
On December 31, Year 1, Company A purchased 75% of Company B’s outstanding common shares for $150,000 in cash. On that date, the carrying amount of Company B’s assets and liabilities approximated their fair value, and the fair value of the non controlling interest (NCI) was $12,000. The following is the summarized balance sheet information for the two companies on December 31, Year 1, before the acquisition.
Company A Company B
Current assets $200,000 $ 80,000
Non current assets 320,000 140,000
Current liabilities 70,000 45,000
Non current liabilities 110,000 55,000
Common stock 100,000 30,000
Retained earnings 90,000 70,000
Additional paid-in capital 150,000 20,000
-Additional information:
-Company B reported net income of $60,000 for the year ended December 31, Year 2. On December 1, Year 2, Company B declared and distributed a cash dividend of $40,000 to its common shareholders.
-On November 15, Year 2, Company A declared and distributed a cash dividend of $25,000 to its common shareholders.
-Company A reported net income of $110,000 in its separate statements for the year ended December 31, Year 2.
-In its separate statements, Company A accounts for its investment in Company B using the equity method.
-During Year 2, no shares of common stock were issued and no items of other comprehensive income were recognized either by Company A or by Company B.
-No intra entity transactions occurred during Year 2.
Use the information above to prepare Company A’s consolidated statement of changes in equity for the year ended December 31, Year 2
Company A's consolidated statement of changes in equity for the year ended December 31, Year 2 reflects the changes in the company's equity resulting from its investment in Company B. The statement shows the impact of net income, dividends, and the equity method accounting on Company A's equity position.
To prepare Company A's consolidated statement of changes in equity, several factors need to be considered. Firstly, the acquisition of 75% of Company B's outstanding common shares for $150,000 in cash on December 31, Year 1 should be accounted for. This acquisition results in Company A gaining control over Company B. The fair value of the non-controlling interest (NCI) is $12,000, representing the portion of Company B not owned by Company A.
Subsequently, the net income reported by both Company A and Company B needs to be considered. Company B reported a net income of $60,000 for the year ended December 31, Year 2, while Company A reported a net income of $110,000 for the same period. These net incomes will impact the consolidated equity of Company A.
The cash dividends declared and distributed by both companies also affect the consolidated equity. Company B distributed a cash dividend of $40,000 to its common shareholders on December 1, Year 2, while Company A distributed a cash dividend of $25,000 to its common shareholders on November 15, Year 2.
By consolidating the equity accounts of Company A and Company B, taking into account the ownership percentage, net incomes, and dividends, the consolidated statement of changes in equity for Company A can be prepared. This statement will reflect the overall changes in equity resulting from the operations and transactions of both companies during the year ended December 31, Year 2.
Learn more about net income here:
https://brainly.com/question/32614743
#SPJ11
2. Suppose that for given labour market conditions, worker bargaining power throughout the economy increases. Discuss, using diagrams, what effect this would have on the real wage and levels of unemployment and output in the short run and in the medium run.
(Please talk in a lot of detail)
Bargaining power is the capacity of workers to seek higher salaries or better working conditions. This power can come from the skills or knowledge that workers have, the competitive nature of the labour market, and the power of unions.
When worker bargaining power throughout the economy increases, it can have a significant impact on the labour market. In this essay, we will discuss the effects of an increase in worker bargaining power on real wages, unemployment, and output in the short and medium term.
Short RunIn the short run, an increase in worker bargaining power would lead to an increase in the real wage and a decrease in employment. The reasoning behind this is the following: With the rise in bargaining power, workers can now demand higher wages, which will cause the cost of production to increase for firms.
This will result in firms producing less output and employing fewer workers. Thus, firms will reduce their production levels, as it will not be profitable to pay higher wages for the same amount of output.The figure below shows the short-term effects of an increase in bargaining power on the labour market:
In the figure, we see that an increase in bargaining power shifts the supply curve to the left, leading to an increase in wages (from w1 to w2) and a decrease in employment (from Q1 to Q2).Medium RunIn the medium run, the effects of an increase in worker bargaining power would depend on the state of the economy. If the economy is in a recession, the impact would be different than in an expansionary period.
However, in both cases, we can expect that an increase in bargaining power would lead to a rise in wages, but the impact on output and employment would be different.In a recession, firms may not be able to afford higher wages, and an increase in bargaining power could cause layoffs and a decrease in production levels.
In this scenario, the real wage may not rise by much or even decline, as workers may be willing to accept lower wages to keep their jobs. As firms continue to cut production levels and reduce employment, the economy may continue to shrink and remain in recession.In an expansionary period, an increase in bargaining power could lead to a rise in wages, output, and employment.
Firms may be able to increase production levels and hire more workers, as demand for goods and services increase. In this scenario, the real wage may rise, but the rise in wages would be less than in the short run due to the increase in output.
The figure below shows the medium-term effects of an increase in bargaining power on the labour market:In the figure, we see that an increase in bargaining power shifts the supply curve to the left (from S1 to S2), leading to an increase in wages (from w1 to w2) and a decrease in employment (from Q1 to Q2) in the short run. However, in the medium run, the supply curve shifts back to the right (from S2 to S3), leading to an increase in output (from Q2 to Q3) and employment (from L2 to L3).
In conclusion, an increase in worker bargaining power would lead to a rise in wages and a decline in employment in the short run. However, in the medium term, the impact would depend on the state of the economy. In an expansionary period, an increase in bargaining power could lead to a rise in wages, output, and employment. However, in a recession, the impact could be negative, leading to a decline in wages, output, and employment.
Learn more about Bargaining power here:
brainly.com/question/28499756
#SPJ11
Question 13 Decreased government purchases and increased taxes both O allow the multiplier effect to freeze the level of aggregate demand O increase aggregate demand O have opposite, offsetting effects on aggregate demand O decrease aggregate demand Question 14 Supply-side economists believe that high marginal income tax rates O increase government revenue O decrease tax evasion O increase total investment O decrease the incentive to work
Decreased government purchases and increased taxes both decrease aggregate demand. . so answer of 13 is decrease aggregate demand. Supply-side economists believe that high marginal income tax rates decrease the incentive to work.so correct answer of question 14 is decrease the incentive to work.
Since government purchases and taxes are part of the government sector of the economy, these changes have the same effect on aggregate demand. An increase in government purchases and a decrease in taxes will both increase aggregate demand, which is the opposite of what is described in this question.
Supply-side economists believe that high marginal income tax rates decrease the incentive to work. The supply-side economists believe that high marginal income tax rates decrease the incentive to work. They argue that a decrease in marginal tax rates would lead to an increase in the supply of labor and a subsequent increase in total output. When people have more money to keep for themselves, they will be more motivated to work and will, therefore, contribute more to the economy. High marginal income tax rates are not believed to increase government revenue because they lead to a decrease in the incentive to work.
Since fewer people are working, there are fewer people to tax, which would lead to a decrease in government revenue. High marginal income tax rates are not believed to decrease tax evasion because they create an incentive for people to hide their income and assets, leading to an increase in tax evasion. High marginal tax rates can discourage investment because they reduce the amount of money that individuals have available to invest in productive enterprises.
Learn more about demand visit:
https://brainly.com/question/30402955
#SPJ11
Triple Net (NNN) leases are often quoted to businesses BUT DO NOT include: a) Real estate taxes b) Building insurance c) Maintenance
Triple Net (NNN) leases do not include maintenance costs. Real estate taxes and building insurance are typically included in NNN leases.
A Triple Net (NNN) lease is a type of commercial lease where the tenant is responsible for paying the base rent as well as additional expenses associated with the property. These additional expenses usually include real estate taxes and building insurance. The concept behind an NNN lease is that the tenant assumes these costs in addition to the base rent, which is typically lower than a gross lease.
However, maintenance costs are not typically included in NNN leases. Maintenance expenses, such as repairs, upkeep, and general property maintenance, are usually the responsibility of the property owner or landlord. The tenant is not required to cover these costs as part of their lease agreement.
By excluding maintenance costs, NNN leases allow property owners to shift the responsibility for ongoing property maintenance to the landlord. This can be advantageous for tenants as they can accurately budget for their expenses and have more control over the maintenance and repair of the property.
Learn more about Triple Net here:
https://brainly.com/question/31846216
#SPJ11
If market puts the highest value on tree as timber than on any other form of the resource (i.e. tree), then all trees should be utilized as timber. Do you agree?
Elaborate
( Environmental Economics)
Disagree. Although the market may assign the highest value to trees as timber, considering only the market value disregards the broader environmental and social implications of tree utilization.
Therefore, it is important to consider other factors such as ecological balance, biodiversity, carbon sequestration, and ecosystem services before making a decision.
While the market may place a high value on trees as timber due to their economic potential, it is crucial to recognize that trees provide various ecological and environmental benefits beyond their market value. Trees play a vital role in maintaining ecological balance, promoting biodiversity, and providing ecosystem services such as air and water purification, climate regulation, and habitat for wildlife.
If all trees were utilized solely as timber, it could have detrimental effects on the environment and society. Overexploitation of trees can lead to deforestation, habitat loss, soil erosion, and the release of carbon dioxide into the atmosphere. This, in turn, can contribute to climate change and loss of biodiversity.
A sustainable approach to tree utilization involves balancing economic interests with environmental considerations. It is important to adopt practices that promote sustainable forestry management, including selective logging, reforestation, and the preservation of protected areas. This approach ensures the long-term availability of timber resources while safeguarding the ecological integrity of forests.
Therefore, while the market may prioritize the value of trees as timber, a more comprehensive and sustainable perspective recognizes the need to balance economic considerations with environmental conservation and the broader well-being of society.
Learn more about tree utilization here:
https://brainly.com/question/17218476
#SPJ11
Discussion topic:
What do you think, why the abolition of "sweatshops" in
developing countries would make those countries and their citizens
worse off
The abolition of "sweatshops" in developing countries could potentially make those countries and their citizens worse off. This is because sweatshops, although criticized for their poor working conditions, often provide employment.
opportunities and economic benefits that may not be easily replaced in the short term. The second paragraph will provide an explanation of this viewpoint.
While sweatshops are often associated with low wages, long hours, and unsafe working conditions, they can also serve as a stepping stone for developing economies. These jobs provide employment opportunities for individuals who may otherwise have limited options, especially in regions with high unemployment rates or limited industrial development. Sweatshops often attract workers due to higher wages compared to other available jobs in the informal sector or rural areas.
Additionally, the presence of sweatshops can contribute to economic growth and development in these countries. They attract foreign investments, foster industrialization, and create a pathway for technology transfer and skill development. The income generated from these jobs can have positive spillover effects on local businesses, supply chains, and overall economic activity.
If sweatshops were abolished without an adequate alternative in place, the consequences could be detrimental to the affected countries and their citizens. Job losses would result in increased unemployment and poverty rates, exacerbating social and economic challenges. Moreover, the absence of sweatshops may discourage foreign direct investment, leading to a decline in economic growth and hindered industrial development.
However, it is important to note that the ultimate goal should be to improve working conditions and promote fair wages within the sweatshop industry, rather than perpetuating exploitation. Efforts should be made to address labor rights, safety regulations, and provide opportunities for workers to transition to higher-paying jobs as the economy develops further.
Learn more about exacerbating here:
https://brainly.com/question/29415285
#SPJ11
Assume that you are on the team auditing Regacho Company's financial statements for the year ended December 31, 2021. You have been asked to review the following list of audit findings to determine the adjusting entry, if any, that should be recommended to the client. Assume all amounts are material a. The bank confirmation returned by the bank indicated that Regacho Company had an outstanding note payable of $100,000 on December 31. Interest on the note is due on the last day of each month at a rate of 12% per year. The confirmation reported that December interest had not been paid. The auditor reviewing the bank confirmation indicated that Regacho Company remitted the interest payment to the bank on January 2, 2022. The outstanding note payable of $100,000 is correctly reflected on the year-end balance sheet; December interest was recorded when payment was made. b. Salaried employees of Regacho Company are paid on the first of each month for the previous month. Besides their regular salary, they receive overtime pay for any hours worked above 40 hours per week. The accounting system automatically records salary expense at the end of each month. Overtime pay is computed separately based on approved time sheets. It is normally paid and recorded on the fifth of each month. Overtime for December in the amount of $38,000 was paid and recorded on January 5, 2022. c. In December 28, 2021, Regacho Company received an advance payment of $50,000 for twork to be provided to a client in January 2022. Regacho prepared the following journal entry when the cash was received: Cash 50,000 Revenue 50,000 d. In January, 2022, Regacho Company was sued by a former client who seeks to recover $150,000 for work performed in December that the client claims is of poor quality. The letter received from Regacho's attorney indicated that it is reasonably possible" that the company will be required to pay the damages asked. Required: For each of the four items, indicate the adjusting entry that should be recommended, if one is necessary. If no entry is required, is any other follow-up by the auditor indicated?
In the given case, we need to determine the adjusting entry that should be recommended for the four given audit findings. Following is the adjusting entry required for each finding:a. The outstanding note payable of $100,000 is correctly reflected on the year-end balance sheet; however, December interest of $1,000 was not recorded in the books.
Therefore, an adjusting entry should be recommended to record the interest expense for the month of December as follows:Debit Interest Expense $1,000Credit Interest Payable $1,000b. The accounting system records salary expense on the last day of each month, but overtime pay for December was not recorded, which was paid on January 5th. Therefore, an adjusting entry should be recommended to record the overtime expense for the month of December as follows: Debit Salary Expense $38,000Credit Overtime Payable $38,000c.
To know more about audit findings visit :-
https://brainly.com/question/32289807
#SPJ11
1. Explain the importance of international trade and why nations trade with each other. 2. Explain why nations import certain goods, even though they can be made more cheaply at home 3. Identify some arguments against free trade
International trade plays a crucial role in the global economy and offers several benefits to nations.Nations may import certain goods, even if they can be produced more cheaply domestically. Economists generally emphasize the overall benefits of open trade while addressing concerns through appropriate policies and safeguards.
The Importance of International Trade and Reasons for Nations to Trade. The reasons why nations engage in trade include:
a) Specialization and Comparative Advantage: Nations have different resource endowments, skills, and technologies, which create opportunities for specialization in the production of goods and services.
b) Access to a wider range of goods and services: International trade allows nations to access goods and services that are not available or produced domestically.
c) Economic Growth and Development: Trade fosters economic growth by promoting investment, innovation, and the transfer of knowledge and technology.
d) Exploitation of Economies of Scale: Trade allows firms to exploit economies of scale by producing goods in larger quantities.
e) Exchange of Ideas and Cultural Understanding: Trade facilitates the exchange of ideas, cultures, and values between nations, promoting mutual understanding and cooperation.
2.Nations may import certain goods, even if they can be produced more cheaply domestically, due to several reasons:
a) Cost and Efficiency: While some goods can be produced more cheaply domestically, importing them may still be more cost-effective due to factors such as economies of scale.
b) Resource Constraints: Nations may lack the necessary resources, such as raw materials or specific skills, to produce certain goods efficiently.
c) Variety and Consumer Preferences: Importing goods satisfies consumer demand for a wider range of choices and allows access to unique or specialized products that are not available domestically.
d) Strategic Considerations: Importing goods can be a strategic decision to ensure a stable supply of essential goods, diversify sources of supply.
3. Arguments Against Free Trade:
While free trade is generally beneficial, some arguments against it include:
a) Job Displacement and Wage Pressures: Critics argue that free trade can lead to job losses in industries that face international competition.
b) Protection of Domestic Industries: Opponents of free trade argue that protective measures, such as tariffs or subsidies, are necessary to safeguard domestic industries from unfair competition.
c) Income Inequality: Free trade can exacerbate income inequality within a country. While trade can lead to overall economic growth, the benefits may not be evenly distributed.
d) National Security Concerns: Critics argue that relying heavily on imports for essential goods, such as food or strategic resources, can pose risks to national security if supply chains are disrupted.
To know more about International trade click here
brainly.com/question/15823129
#SPJ11
