Economics Answers

When demand falls, the equilibrium price falls, and the quantity supplied decreases, all other factors remaining constant.

The controller of Pane Co. was preparing the company's financial statements. Pane had a wholly owned subsidiary in a foreign country that used the euro as its currency. At December 31, the exchange rate was $1 U.S. for 1.25 euro. The weighted average exchange rate for the year was $1 U.S. for 1.50 euro. At December 31, the subsidiary had assets of 1 million euro and revenue for the year of 2 million euro. What amounts would assets and revenue translate for consolidation?   

In what ways can the Economics teachers be assisted to improve on their skills in continuous assessment practice with a view to enhance learners’ optimum performance?

1. The government has called upon its residents and citizens to pay taxes and assume monetary burdens so that it can finance public needs and perform its functions. Mr. Dela Cruz refused to pay taxes. Accordingly, he does not care whether the government continue to exist or not. Aside from that, he just wanted to save all his millions for himself. Is the contention of Mr. Dela Cruz correct? Why?

What is supply curve

1. The equity beta of WealthCorp Ltd is 1.10, the market risk premium is expected to be 9%, and the yield on government bonds is currently 12%. WealthCorp Ltd issued bonds (R100 par value) that are currently trading at R80 and have a 5% coupon rate. The corporate tax rate is currently 25% and the maturity date of the bonds is in 10 years. Using the CAPM, calculate the cost of equity and the market’s overall expected rate of return (Rm).

The organization structure of a Bank’s Treasury unit involves designing of its operations across Front office, Mid-office, and Back office. Describe each of these three operating arms in terms of its nature, purpose / objectives, and the skills / qualifications of the people employed in these 3 operating arms

The balance sheet of Starsky Company at December 31, 2019, includes the following.

Notes receivable                                            $36,000

Accounts receivable                                      182,100

Less: Allowance for doubtful accounts         17,300                        $200,800

Transactions in 2020 include the following.

1. Accounts receivable of $138,000 were collected including accounts of $60,000 on which 2% sales discounts were allowed.

2. $5,300 was received in payment of an account which was written off the books as worthless in 2019.

3. Customer accounts of $17,500 were written off during the year.

4. At year-end, Allowance for Doubtful Accounts was estimated to need a balance of $20,000. This estimate is based on an analysis of aged accounts receivable.

Manilow Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Manilow’s Accounts Receivable account was $555,000 and Allowance for Doubtful Accounts had a credit balance of $40,000. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below.

Days Account Outstanding;   Amount;    Probability of Collection

Less than 16 days    $300,000    .98

Between 16 and 30 days  100,000   .90

Between 31 and 45 days   80,000     .85

Between 46 and 60 days   40,000   .80

Between 61 and 75 days   20,000   .55

Over 75 days (to be written off)  15,000    .00

Instructions

a. What is the appropriate balance for Allowance for Doubtful Accounts at year-end.

b. Show how accounts receivable would be presented on the balance sheet.

c. What is the dollar effect of the year-end bad debt adjustment on the before-tax income?

Study Exercises

MyLab Economics

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 Fill-in-the-Blank

1. Fill in the blanks to make the following statements correct.

 a. If the marginal cost of producing the last unit of a product is the same for all firms in an industry, we can say that the industry is ________ efficient, but we do not know enough to say that the industry is ________ efficient.

 b. If the marginal cost of some product is $12, and the market price of that product is$15, then to achieve allocative efficiency, the economy should produce ________ of this product and therefore ________ other products.

 c. The market structure that leads to both productive and allocative efficiency is ________.

d. A monopolistic industry may be productively efficient but will not be allocatively efficient because ________.