![]() ![]() Professional services AnswerNet assets with donor restrictionsNet assets without donor restrictionsNet assets with donor restrictions, reclassified to Net assets without donor restrictionsNo entry Gorman normally gets $200 an hour for legal services, and Taconic normally pays $8 an hour when it hires ushers. He spent 12 hours preparing contracts for the services of professional singers and 8 hours serving as an usher before performances. Attorney Howard Gorman volunteered his services to Taconic Singers, a nonprofit. Start of 2020 AnswerNet assets with donor restrictionsNet assets without donor restrictionsNet assets with donor restrictions, reclassified to Net assets without donor restrictionsNo entryĢ. June 2019 AnswerNet assets with donor restrictionsNet assets without donor restrictionsNet assets with donor restrictions, reclassified to Net assets without donor restrictionsNo entry ![]() (Identify the affected net asset classification(s) in the journal entries made both in June 2019 and at the start of 2020.) Donor A gave the nonprofit a cash gift of $50,000 in June 2019, telling the nonprofit the gift could not be used until 2020. If net assets are not affected by the transaction, select No entry as your answer.ġ. Both net asset classifications may be affected in some transactions. Trade policy is a fiscal policy as government can use it to control aggregate demand by placing embargo on the importation of certain products to reduce the demand of such products in the local economy.įor each of the following transactions, identify the net asset classification (without donor restrictions, with donor restrictions) that is affected in the nonprofit’s financial statements for the year ended December 31, 2019. tariffs, import duties, custom duties among others). Trade policy could be in the form taxes (i.e. Taxes – Tax is a fiscal policy tool used by the government to generate revenue, encourage or discourage the consumption of certain products or affect aggregate demand through income redistribution. to supply goods and services that are not provided by the market or private sector – construct bridges, provide health facilities, social programmes for the poor among others). Government spending is a fiscal policy that government uses to achieve a set of objectives (i.e. Money supply is a monetary policy and it is used by the central bank to achieve certain objectives (reduce inflation, stimulate growth, increase demand, etc.) On the flipside, they may reduce taxes to stimulate spending, redistribute income, increase aggregate demand among other objectives. ![]() ![]() Government may increase taxes to increase revenue or discourage the consumption of a product. Therefore the value to be utilized as the value of the Account Receivable 60,000.īelow is the accounting entries to record the transaction and recognized profit.ĭebit: Account Receivable Account(Debtors) 60,000.00Ĭredit: Account Receivable Purchase Account 60,000.00ĭebit: Account Receivable Purchase Account 60,000.00Ĭredit: Account Receivable Account(Debtors) 60,000.00Īll answers are correct except Money Supplyįiscal policy affects aggregate demand through government spending and taxes. Net Realizable value of the Account Receivable therefore is 80,000. Net realizable value (NRV) is the value that can be realized from the sale of an asset. The cost of this Account Receivable therefore is 60,000 Debt instruments in accounting are valued at Lower of Cost or Net Realizable Value.Ĭost is the amount of cash or its equivalent that was expended to obtain an asset. The Account Receivable can be defined as a Debt Instruments. Rather she made a profit on the transaction. There is no Bad debt deduction for Sally. Sally’s basis in the Account Receivable is $60,000 Mis-allocation of resources causes the business to produce less than its optimum capacity, hence a reduction in output and an eventual inward shift of the PPC.Ī natural disaster leads to economic crunch and a decline in aggregate demand, hence an inward shift of the PPC Thereby reducing output, hence an inward shift of the PPC. Increase in the price of raw materials elevates the cost of production and the ability of the producer to produce more. Recession occurs when there is a decline in aggregate demand and a decrease in aggregate demand forces businesses to cut jobs, which shifts the production possibility curve inward. Unemployment increases during economic recession and increases during economic boom. The factors that shift the PPC inward are decline in labor demand (increase in unemployment), decrease in capital and technology backwardness. All the options except productivity (option A) will shift the production possibility curve (PPC) inward. ![]()
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