Economics Answers

assume that December 31 forecast shows the estimated uncollectible accounts to be $27,860 and that the allowance for doubtful accounts for the company had a debit balance of $1,575 on December 31.

Journalize the adjusting entry for uncollectible accounts as of December 31 for the next year.

A student is considering opening a business selling ice cream next summer. The student views this as an alternative to taking summer employment with a local firm where he would earn £4,000 during the 3-month summer period. It would cost £2,000 to obtain a license to operate their stand, £1,200 per month to rent the stand with the necessary equipment and £150 per month for insurance. Petrol costs are estimated at £12 per day and are not affected by sales. The ice cream ingredients can be bought for £5.60 per kilo and cones cost £1.80 per dozen. The ice cream cones contain 100 grams of ice cream and would sell for £1.50 each.

d) Chocolate flakes can be bought at £5 for a box of 20, and the ice creams with flakes are sold for £2.20. If 40% of the customers buy these, calculate the effect of this on the output necessary to make normal profit.
e) If the student can sell 200 ice creams a day, 40% with flakes, estimate the economic profit he would make. Advise him whether he should enter the business.

Q2: Suppose that when everyone wakes up tomorrow, they discover that the government has given them an additional amount of money equal to the amount they already had. Explain what effect this doubling of the money supply will likely have on the following:

a. the total amount spent on goods and services

b. the quantity of goods and services purchased if prices are sticky

c. the prices of goods and services if prices can adjust

The repayment schedule for the ARSLAN truck requires a down payment of 10% while the repayment schedule for the HIDRO-MAX truck requires a down payment of 15%. If the repayment is over a period of 7 years at an annual loan rate of 6%, what would be the monthly repayment amount for both schedules? Assume that the monthly repayment starts 1 month after the mortgage contract is signed and the down payment made. Show all calculations.

Discuss how the stimulus package will impact on the following macroeconomics indicators:
i) Public debt ii) Balance of trade

Explain, with the aid of a diagram the type of unemploymentthat thetwomain business organisations are being askedto prevent.

Assess, using both the Keynesianand Classical/Monetarist frameworks, the impact of the macroeconomics stimulus package on GDP and inflation.

Explain, with aid of diagrams, the anticipated transmission mechanism thatcan result from a simultaneous reduction in the reserve requirement and the repo rate.

(a) A mother is thinking about funding her daughter’s medical education in 6 years when she is expected to enrol at UWI, St. Augustine. She opens a special savings account, where she can receive a lump sum in 6 years. If she is desirous of receiving $50,000 in 6 years when her daughter is matriculating, how much would you advise her to deposit in the savings account monthly if annual interest rate is 7%? Show all working.

Why is salaryof each partner included in the partnership agreement if it depend on the profit earned in the business?