Answer: $1091.61
Explanation:
From the question, we are told that fifteen years ago, Mr. Fairhold paid $50,000 for a single-premium annuity contract and that this year, he began receiving a $1,300 monthly payment that will continue for his life and based on his age, he can expect to receive $312,000. The amount of each monthly payment is taxable income to Mr. Fairhold goes thus:
Based on the question, Mr Fairhold will have a tax free return of the $50,000 paid. The exclusion ratio will be the investment divided by the expected return. This will be:
= $50,000/$312,000
= 0.1603
Since he received monthly payment of $1,300 and exclusion ratio is 0.1603, the tax free return on investment will be:
= $1,300 × 0.1603
= $208.39
Taxable annuity payment will now be:
= $1300 - $208.39
= $1091.61
Answer:
That statement is true
Explanation:
Pre-determined overhead is the method of overhead calculation that being done at the beginning of each accounting period. They use the number based on estimation from the performance on the previous period.
Determining pre-determined overhead of a machine is far easier compared to human labor since machine tend to give stable performance.
Since larger companies tend to use more machines than smaller companies, pre-determined overhad is more common among larger companies and rarely found in smaller ones.
Answer:
Dr Factory overhead $73,000
Cr Factory wages payable $73,000
Being cost of indirect labor for the month
Explanation:
The factory overhead cost account needs be debited because the cost is an indirect cost of production, this is also due to the fact that the transaction is an increase in expense as increase in expense account is automatically a debit entry.
The corresponding entry was credited to factory wages payable as the amount is owed to factory workers,as a result it remains in payable account until it is eventually settled in cash which would mean the cash account is credited and the factory wages payable account is debited.
Answer:
A. Set above equilibrium price
Explanation:
A price ceiling is a mandatory maximum price that a seller is allowed to charge. Generally, a government may impose this in order to protect consumers, especially with regards to the purchase of essential goods.
If the price ceiling was set below the equilibrium price (option c) or if the equilibrium price is above the price ceiling (option b), it will immediately cause a shortage (option d) since the quantity demanded would be higher than the quantity supplied when the price falls. This is because people will be willing to purchase more since it is cheaper but suppliers will be willing to produce less due to lower profits. Hence, options b, c and d are eliminated.
Option A is correct because... (please refer attached diagram):
When the price ceiling is above the equilibrium price, suppliers are willing to supply more since they can make higher profits but consumers will reduce purchasing since it is expensive. However, it does not cause any immediate effect because it takes time for suppliers to be able to produce more and cannot be done immediately unless anticipated in advance. In the long run however, quantity demanded will fall from equilibrium quantity to D1 and quantity supplied will rise from equilibrium quantity to S1. Hence, causing a surplus between D1 - S1 in the long run.
