How much potential money could be created from a new deposit of $2,000 and with a reserve ratio of 10%? How would it affect the ability of bank to create money if the reserve ratio decreased to 5%?

Answers

Answer 1

Answer:

To calculate the effect of the bank's ability to create money with a decrease in reserve ratio.

Given:

New deposits= $2000, Reserve ratio= 10 percent

To calculate the money multiplier= 1/10%= 1/0.1= 10

To calculate the money that was created we multiply the multiplier by the new deposits.

Therefore: 10*2000= $20,000

To calculate the amount created when the reserve ratio is 5%

To calculate the money multiplier= 1/5%= 1/0.05= 20

Therefore the money created will be 20*2000= $40,000

Based on $20000 extra gained, a decrease in the reserve ratio to 5% will lead to an increase in the capacity f the bank to make more money.

Explanation:

To calculate the effect of the bank's ability to create money with a decrease in reserve ratio.

Given:

New deposits= $2000, Reserve ratio= 10 percent

To calculate the money multiplier= 1/10%= 1/0.1= 10

To calculate the money that was created we multiply the multiplier by the new deposits.

Therefore: 10*2000= $20,000

To calculate the amount created when the reserve ratio is 5%

To calculate the money multiplier= 1/5%= 1/0.05= 20

Therefore the money created will be 20*2000= $40,000

Based on $20000 extra gained, a decrease in the reserve ratio to 5% will lead to an increase in the capacity f the bank to make more money.


Related Questions

Imagine you have some workers and some handheld computers that you can use to take inventory at a warehouse. There are diminishing returns to taking inventory. If one worker uses one computer, he can inventory 150 items per hour. Two workers sharing a computer can together inventory 200 items per hour. Three workers sharing a computer can together inventory 250 items per hour. And four or more workers sharing a computer can together inventory 260 items per hour. Computers cost $125 each and you must pay each worker $30 per hour.
a. If you assign one worker per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places.
$ _____ per item
b. If you assign two workers per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places.
$ _____ per item
c. If you assign three workers per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places.
$_____ per item
d. If you assign four workers per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places.
$_____ per item.
e. How many workers per computer should you assign if you wish to minimize the cost of inventory per single item?
_____ worker(s) per computer

Answers

Answer and Explanation:

The computation of each point is shown below:-

a. If one worker per computer, so the cost of inventorying a single item is

Cost = Total cost ÷ Number of units inventoried

= ($125 + $30) ÷ 150

= $155 ÷ 150

= $1.03

b. If two workers per computer, so the cost of inventorying a single item is

Wage = $30 × 2

= $60

Cost = Total cost ÷ Number of units inventoried

= ($60 + $125) ÷ 200

= $175 ÷ 200

= $0.88

c. If three workers per computer, so the cost of inventorying a single item is

Wages = $30 × 3

= $90

Cost = Total cost ÷ Number of units inventoried

= ($90 + $125) ÷ 250

= $215 ÷ 250

= $0.86

d. If four workers per computer so, the cost of inventorying a single item is

Wages = $30 × 4

= $120

Cost = Total cost ÷ Number of units inventoried

= ($120 + $125) ÷ 250

= $245 ÷ 250

= $0.98

e. According to the above calculation, there are three workers which are to be assigned per computer so that the inventory amount can be reduced.

Bio-Lab Pharmaceuticals carried on a project to develop a new drug that dramatically shortened the recovery period for flu infection. The project cost the company $150,000 before Bio-Lab abandoned the project due to the slim possibility to gain FDA approval. Bio-Lab then spent $300,000 on another project developing a kind of shot that achieves the same goal for flu recovery, and the company is confident in gaining FDA approval for the new shot and in making profits out of the shot. What amount would be expensed

Answers

Answer:

$450,000

Explanation:

Calculation for the amount that would be expensed

Using this formula

Amount to be expensed = Project cost before the project was abandoned + Amount spent on another project

Let plug in the formula

Amount to be expensed =$150,000+$300,000

Amount to be expensed =$450,000

Therefore the amount that would be expensed will be $450,000

On behalf of Bobble Head Manufacturing Company, Carmela types her name at the bottom of an e-mail purchase order and submits the order to Designer Parts Company. Under the UETA, Carmela’s typed name qualifies as Group of answer choices

Answers

Answer:

A signature.

Explanation:

On behalf of Bobble Head Manufacturing Company, Carmela types her name at the bottom of an e-mail purchase order and submits the order to Designer Parts Company. Under the UETA, Carmela’s typed name qualifies as signature.

Ally, a minor, purchases a car from a used-car dealer. The law allows minors the right to cancel a contract until the time the minor turns 18. The contract between Ally and the dealer is Multiple Choice an unenforceable contract. a valid contract. a voidable contract. a void contract.

Answers

Answer:

Her contract is C) A VOIDABLE CONTRACT

Explanation:

hope this helps :)

Budweiser is a popular brand of beer. Part of this company's market research of U.S. consumers looked at education levels of beer consumers. What education level is the likely consumer of beer (that with highest propensity to buy and consumer beer) to have attained

Answers

Answer:

did not graduate high school

Explanation:

Survey Reports from the Simons Dataset for research and Development, Indicate that the vast majority of individuals in the US that are consumers of beer did not graduate high school. The reason for this can vary largely. Psychologists believe that these individuals started consuming alcohol at an early age due to childhood trauma and their addiction caused them to abandon their education.

Deborah works for a telecommunications company, and she prides herself on the fact that her job duties help keep the emergency service phone line operating, which ultimately saves lives. Deborah's sentiment reflects

Answers

The question is incomplete:

Deborah works for a telecommunications company, and she prides herself on the fact that her job duties help keep the emergency service phone line operating, which ultimately saves lives. Deborah's sentiment reflects:

A. skill variety

B. autonomy

C. task significance

D. task identity

E. feedback

Answer:

C. task significance.

Explanation:

-Skill variety refers to abilities people need to be able to do a job.

-Autonomy is when a person is able to act on its own.

-Task significance is when a job has a positive impact on other people inside and outside of the company.

-Task identity refers to doing something from start to finish with a visible result.

-Feedback is when employees receive an evaluation from their supervisors in which they get suggestions to maintain certain performance and possible improvements that can be made.

According to this, the answer is that Deborah's sentiment reflects task significance because her job helps to save lives which means that it has a positive impact on people.

Deborah priding herself on the fact that her job duties help saves lives

exhibits what we refer to as task significance.

Task significance refers to the employees of a company viewing their roles

as being important within and outside the company.

Deborah in this scenario talks about how her job duties help keep the

emergency service phone line operating, which ultimately saves lives. This

sentiment reflect task significance which is why it is the right choice of all the options.

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Smith and Benson make an oral contract for the sale of some land at a price of $500,000. After paying Smith $400,000 of the purchase price, Benson takes possession of the land. One month later, Smith wants to boot Benson off the land. His argument is that the parties' oral agreement is unenforceable under the statute of frauds. Which of the following is most correct?
A. Smith is correct, because the contract is for an amount greater than $500.
B. Smith is correct, because this is an oral contract for the sale of real estate.
C. Smith is incorrect, because the contract is for an indefinite period of time.
D. Smith is incorrect, because Benson paid part of the purchase price and took possession.

Answers

Answer:

D. Smith is incorrect, because Benson paid part of the purchase price and took possession.

Explanation:

Since in the question, there is a contract between the Smith and Benson for the sale of land but after paying the $400,000 the Benson takes the land possession. but according to the Smith it is an unenforceable contract under the statute of frauds.

So as Benson pay the amount of $400,000 and take the possession so in this case the Simon is incorrect

Hence, the option d is correct

Q 5.15: At the beginning of January 2017, a company reported inventory of $4,000. During the month, the company made purchases of $17,800. On January 31, 2017, a physical count of inventory reported $4,200 on hand. Find the cost of goods sold for the month.

Answers

Answer:

COGS= $17,600

Explanation:

Giving the following information:

Beginning inventory= $4,000

Purchase= $17,800

Ending inventory= $4,200

To calculate the cost of goods sold (COGS), we need to use the following formula:

COGS= beginning finished inventory + cost of goods purchased - ending finished inventory

COGS= 4,000 + 17,800 - 4,200

COGS= 17,600

The University of Kay and Kaytech University are bitter cross-town rivals. They compete in everything from sports to academics. Due to decreasing enrollment, the schools make an agreement to give all incoming students free tuition for one semester before raising the existing rates the following semester. This action is most likely to be considered a:___________.
A. horizontal agreement in violation of the Sherman Act.
B. vertical agreement in violation of the Sherman Act.
C. tying agreement in violation of the Clayton Act.
D. reciprocal dealing agreement violating the Clayton Act.
E. licensing agreement violating the Clayton Act.

Answers

Answer:

A. horizontal agreement in violation of the Sherman Act.

Explanation:

According to the Sherman Antitrust Act of 1890 it restricted the activities related to interstate commerce and the competition arise in the market place

The horizontal agreement is an agreement which is done between the business who are competing with each other in order to modify the competition for all the available competitors in the market

Therefore according to the given situation, the correct option is A.

Janet and Chrissy want to move into an apartment near their school. They have agreed to divide all costs equally. They plan to use a broker to find their apartment. The broker charges 20% of the first month's rent as a finder's fee. Their first choice apartment rents for $850.00 per month. The landlord requires the first month's rent plus a security deposit of 1.5 month's rent. How much money will Janet need in order to move in to this apartment?

Answers

Answer: $1147.50

Explanation:

Monthly apartment fee = $850

Broker's charge = 20% of first month fee

Security deposit = 1.5 months rent

Therefore,

Broker's fee = 20% × $850

= 0.2 × $850 = $170

Security deposit = 1.5 × $850 =$1275

Total fee = $850 + $1275 + $170 = $2295

Since Chrissy and Janet are sharing the fee equally:

Janet's share :

50% of $2295 = $1147.50

Wallace Motors measures and evaluates the quality of its cars and services against the market leaders in the automobile industry. Wherever there is a gap, Wallace Motors tries to cover that gap by imitating the best practices of these market leaders. This is known as

Answers

Answer:

Benchmarking

Explanation:

Benchmarking is defined as the activity where a company's processes and performance is compared with industry best practices. Qualities measured usually include time, cost, and quality.

In the given scenario Wallace Motors measures and evaluates the quality of its cars and services against the market leaders in the automobile industry. This the use of be marching.

When the companies metrics don't meet up, the company adopts the practices of the benchmark or later in your dreams

Hannigan Lumber employs 155 workers. One of the firm's former employees used the Civil Rights Act of 1991 to file and win a discrimination lawsuit against Hannigan Lumber. What is the maximum amount of punitive damages that the former employee could receive

Answers

Answer: $100,000

Explanation:

The Civil Rights Act of 1991 prohibits every form discrimination in organizations that are based on religion, race, gender, color, or ethnic considerations.

Since Hannigan Lumber employs 155 workers, if one of the firm's former employees used the Civil Rights Act of 1991 to file and win a discrimination lawsuit against Hannigan Lumber, the maximum amount of punitive damages that the former employee could receive will be $100,000.

This is because according to the law, an employer that has employees of about 101-200 workers will pay demages of $100,000 if a discrimination lawsuit is won.

Consider the example of an individual in a grocery store examining two cans of peaches, Alpha Peaches and Beta Peaches. If Alpha is thought to provide 10 units of pleasure per dollar and Beta is thought to provide 8 units per dollar, then Alpha should be chosen.
a) true
b) false

Answers

Answer:

True.

Explanation:

True, The given situation is true because the pleasure (utility) provided by Alpha is greater than the pleasure (utility) provided by the Beta. Therefore, a rational person will buy only that commodity which has a higher utility. Here, we can see the Alpha provides 10 units of utility or pleasure per dollar while Beta provides 8 units of utility or pleasure per dollars. So, only Alpha will be chosen.

For example, the sticky-wage theory asserts that output prices adjust more quickly to changes in the price level than wages do, in part because of long-term wage contracts. Suppose a firm signs a contract agreeing to pay its workers $15 per hour for the next year, based on an expected price level of 100. If the actual price level turns out to be 110, the firm's output prices will

Answers

Answer:

The firm's output prices will increase, because will the firm can quickly adjusts the prices of goods to the new price level of 110, it will not have to do so with wages, since wages are fixed by a year contract.

This will result in comparatively lower labor costs with higher prices at the same time, which will likely result in more economic and accounting profit for the firm.

The opposite effect will be felt by workers, whose wage is not keeping up with inflation, meaning that their income is losing purchasing power.

Which of the following factors, if any, is not a characteristic of independent contractor status? a.Workplace fringe benefits are not available. b.Services are performed for more than one party. c.Work-related expenses are reported on Schedule A (Form 1040). d.Receipt of a Form 1099 reporting payments received. e.None of these choices are correct.

Answers

Answer:

c. Work-related expenses are reported on Schedule A (Form 1040).

Explanation:

An independent contractor can be defined as a self employed individual or business entity that provides services or work for another for an agreed fee.

This ultimately implies that, an independent contractor is a non-employee of the organization he provides services or work for. Some examples of independent contractor are consultants, engineers, lawyers, accountants, auditors, doctors etc.

Hence, reporting work-related expenses on Schedule A (Form 1040) is not a characteristic of independent contractor status.

However, independent contractors are required by law to report income and expenses on Schedule C (Form 1040) and report all their profits or losses on Schedule E (Form 1040) in the United States of America.

Additionally, an independent contractor status suggests that workplace fringe benefits are not available, services are performed for more than one party and must have receipt of a Form 1099 reporting payments received.

Airbase is a consumer electronics company known for its affordable mobile devices that follows a cost-leadership strategy. In this scenario, Airbase should ideally compare its strategic position with:__________.
1. a company that sells small kitchen appliances at affordable prices.
2. an online company that sells customized electronics accessories.
3. a consumer electronics company that sells high-end devices.
4. a consumer electronics company popular among price-conscious customers.

Answers

Answer: 4. a consumer electronics company popular among price-conscious customers.

Explanation: Companies who thread a cost-leadership strategy or path could be said to be 'price-centric', that is gives price huge cognizance and will strive to be a market or industry leader when it comes to giving best and most affordable prices on products.

Thus, since Airbase follows a cost leadership strategy and also popular among consumers for its affordable devices, it should also weigh or compare it's strategy to other consumer electronics company which is popular among consumers which gives cognizance to price of products they purchase.

Network design decisions have a significant impact on performance because they determine the supply chain configuration and set constraints within which inventory, transportation, and information can be used to either decrease supply chain cost or increase responsiveness. True or False

Answers

Answer:

true

Explanation:

Which professional helps individuals and families minimize risk?

Answers

Answer:

insurance agent.

the career profession who would help individual and families to manage and minimise risk would be insurance agent.

Explanation:

insurance is a field that manages protection from financial loss thus risk to it iwould be a component that they manage. insurance insurance agent would recommend the best product for individual and families according to their lifestyle and age

Cindy's Ceramics engaged in a like-kind exchange that resulted in a $3,000 gain. In addition to the like-kind property received in the transaction, Cindy also received $5,000 cash. Cindy will have to recognize $

Answers

Answer:

$3,000

Explanation:

Data provided in the question

Gain received while exchanged = $3,000

Received cash = $5,000

Based on the above information, the Cindy recognize the gain i.e $3,000 which is received while exchanged it

Therefore in the given case, the Cindy have to recognize the gain for $3,000

The cash amount received should be ignored

Suppose you are in charge of establishing economic policy for the small island country.
Which of the following policies would lead to greater productivity in the fishing industry.
A. Imposing restrictions on foreign ownership of domestic capital.
B. Subsidizing research and development into new fishing technologies.
C. Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts.
D. Sharply increase the interest rate on student loans to people pursuing advanced degrees in fishing.

Answers

Answer:

Option B, Subsidizing research and development into new fishing technologies, is the right answer.

Explanation:

Option B will be the right policy to increase the greater productivity in the fishing industry because if the government encourages the research and development then people will generate new technology to catch the fishes. Thus, new technology will increase the number of fishing. As a result, productivity will be increased in the fishing industry.

You have been providing a pre-Thanksgiving meal during sales presentations in November for many years and your clients look forward to attending this annual event. When marketing Medicare Advantage and Part D plans, what are you permitted to do with respect to meals?

Answers

Answer: Provide light snacks

Explanation:

In a Medicare advantage, a proper meal will not be allowed, the focus of the program is targeted at the Medicare section, so preparing a normal Neal would serve as a distraction to the purpose of the program, even those requesting would be prohibited for such, so what's required would be normal snacks which won't attract attention and individuals can focus on the program: Medicare.

Answer:

b.

You may provide light snacks, but a Thanksgiving style meal would be prohibited, regardless of who provides or pays for the meal.

Explanation:

A meal is considered a distraction to the presentation material, snacks only

A master budget​ ________. A. is only prepared for manufacturers as they are the only type of company with material purchases and work−in−process accounts. B. improves​ companies' market capitalization and evolves from both the investing and financing decisions C. is another name given to the financial budget D. is the initial plan of what the company intends to accomplish in the period and evolves from both the operating and financing decisions

Answers

Answer:

D. is the initial plan of what the company intends to accomplish in the period and evolves from both the operating and financing decisions.

Explanation:

Bill Kroganski is the owner of a moderately successful industrial services firm. His reaction to the introduction of a new process technology that could be a direct competitor to the process his firm utilizes is fear. He spends his time considering ways to isolate his firm from this new technology. Bill has characteristics consistent with the entrepreneurial mind-set.
a) true
b) false

Answers

Answer:

False

Explanation:

I've come across this question before.

Bramble, Inc. has 8 computers which have been part of the inventory for over two years. Each computer cost $530 and originally retailed for $950. At the statement date, each computer has a net realizable value of $360. What value should Bramble, Inc., have for the computers at the end of the year?

Answers

Answer:

$2,880

Explanation:

US GAAP requires companies to value their inventories at lower of cost or net realizable value.

so we calculate both:

the cost = 8 x $530 = $4,240the net realizable value = 8 x $360 = $2,880

Since the net realizable value is lower, then the computers must be recorded at that price.  

​rural residential development company and suburban real estate corporation form a joint stock company. the longest duration a joint stock company can be formed for is

Answers

Answer: Perpetual existence

Explanation:

The longest duration a joint stock company can be formed for is perpetual existence.

Perpetual existence is a feature that simply means that the organization involved has no expiration date, and has an unlimited term of existence. Even in case of death of the owners, the organization will still continue.

Distinguish among operating, investing, and financing activities for the statement of cash flows indirect method) Aurum Investments specializes in low-risk government bonds. Identify each of​ Vanderpool's transactions as operating​ (O), investing​ (I), financing​ (F), non-cash investing and financing​ (NIF), or a transaction that is not reported on the statement of cash flows​ (N). Indicate whether each item increases​ (+) or decreases ​(minus​) cash. The indirect method is used for operating cash flows.
A. Acquisition of equipment by issuance of note payable
B. Purchase of long-term investment with cash
C. Issuance of long-term note payable to borrow cash
D. Increase in prepaid expenses
E. Decrease in accrued liabilities
F. Loss of sale of equipment
G. Decrease in accounts receivable
H. Depreciation of equipment
I. Increase in accounts payable Amortization of intangible assets
K. Purchase of treasury stock
L. Payment of long-term debt
M. Increase in salary payable
N. Cash sale of land
O. Sale of long-term investment
P. Acquisition of building by cash payment
Q. Net income
R. Issuance of common stock for cash
S. Payment of cash dividend

Answers

Answer and Explanation:

The cash flow statement includes three categories of activities which are listed below:

1. Operating activities: This covers all transactions that after net income impact the working capital. This will subtract the rise in current assets and a reduction in current liabilities, while adding the decline in current assets and a rise in current liabilities.

It will manage some adjustments in working capital. For addition, the depreciation expenses are applied to the net profit and the loss on the selling of assets is added, while the profit on the sale of assets is deducted

2. Investing activities: it tracks operations that involve purchasing and selling long-term properties. The buying is a cash outflow while the sale is a cash inflow

3. Financing operations: it tracks transactions that have an impact on long-term debt and equity balance of shareholders. Share issue is a cash inflow while redemption and dividends are cash outflows.

Based on the above explanation, the classification is as follows

A. , non-cash investing and financing​ (NIF), as it does not involve any cash transactions

B. Investing activity as this reflects the cash outflows

C. Financing activity as this reflects the cash inflows

D. Operating activity as this reflects the cash outflows

E. Operating activity as this reflects the cash outflows

F. Operating activity as this reflects the cash inflows

G. Operating activity as this reflects the cash inflows

H. Operating activity as this reflects the cash inflows

I. Operating activity as this reflects the cash inflows

J. Operating activity as this reflects the cash inflows

K. Financing activity as this reflects the cash outflows

L. Financing activity as this reflects the cash outflows

M. Operating activity as this reflects the cash inflows

N. Investing activity as this reflects the cash inflows

O.  Investing activity as this reflects the cash inflows

P. Investing activity as this reflects the cash outflows

Q. Operating activity as this reflects the cash inflows

R. Financing activity as this reflects the cash inflows

S. Financing activity as this reflects the cash outflows

At the end of year 1, a company reduced its inventory cost from $100 to its net realizable value of $80. As of the end of year 2, the inventory was still on hand and its net realizable value increased to $150. Under IFRS, what journal entry should the company record for year 2 to properly report the inventory value

Answers

Answer and Explanation:

According to the given situation, the Journal entry is shown below:-

Inventory Dr, $20 ($100 - $80)

              To Expense $20

(Being inventory for year 2 is recorded)

Here we debited the inventory as it increased the assets and we credited the expenses as it decreased the expenses so that the proper posting could be done

If the price elasticity of demand for U.S. automobiles is higher in Europe than it is in the United States, and transport costs are zero, a price-discriminating monopolist would charge:__________.
a. a less profitable price for autos in the United States than in Europe.
b. a lower price for autos in the United States than in Europe.
c. the same price for autos in the United States as in Europe.
d. a higher price for autos in the United States than in Europe.

Answers

Answer:

d. a higher price for autos in the United States than in Europe.

Explanation:

As it is mentioned that the price elasticity of demand in more in Europe as compared with the United States that represents a slight increase in price would decline the immense demand in Europe

Plus the elasticity in the united states is not high that reflects that change in price have a less impact on quantity demanded

Therefore the option d is correct

As a result of a slowdown in operations, Mercantile Stores is offering to employees who have been terminated a severance package of $100,000 cash, another $100,000 to be paid in one year, and an annuity of $30,000 to be paid each year for 20 years. Use present value tables to compute the present value of the complete package, assuming an interest rate of 8 percent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1)

Answers

Answer:

$487,137.

Explanation:

So,new are given the following data or parameters or information which is going to aid or assist us in solving this particular Question or problem.

=> "Mercantile Stores is offering to employees who have been terminated a severance package of $100,000 cash, another $100,000 to be paid in one year, and an annuity of $30,000 to be paid each year for 20 years. "

=> "assuming an interest rate of 8 percent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1)"

STEP ONE: determine the present value of a payment in 1 year.

Present value = face value/ (1 + rate of interest)^number of year.

Present value = 100,000/ (1 + 0.08)^1.

Present value = $294,544

STEP TWO: determine the present value in the next 20 years.

Present value in the next 20 years = 30,000/0.08 { 1 - (1 + 0.08)^-20}.

Present value in the next 20 years = $294,544.

STEP THREE: detemine the total present value.

total present value = $100,000 + $294,544 + $294,544 = $487,137.

Present value of complete package is $487,137 (Approx.)

Given that;

Future value FV = $100,000

Number of year n = 1

Rate of interest r = 8% = 0.08

Number of annuity year n = 20

Annual annuity = $30,000

Find:

Present value of complete package

Computation:

PV for 1 year payment;

PV = FV/(1+r)ⁿ

PV = 100,000/(1+0.08)¹

PV = 100,000/(1.08)

PV = $92,592.6 (Approx.)

PV for 20 year payment;

PV = [A/r][1-(1+r)⁻ⁿ]

PV = [30,000/0.08][1-(1+0.08)⁻²⁰]

PV = $294,544.4 (Approx.)

Present value of complete package = $100,000 + $92,592.6 + $294,544.4

Present value of complete package = $487,137 (Approx.)

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A company had the following treasury-stock related account balances: Treasury Stock - $150,000 Paid-in Capital from Treasury Stock Transactions - $15,000 If the company resells Treasury Stock that originally cost $50,000 for $40,000, then __________.

Answers

Answer: If the company resells Treasury Stock that originally cost $50,000 for $40,000, then paid-in capital from treasury stock transactions is reduced by $10,000.

Explanation:

Given: A company had the following treasury-stock related account balances: Treasury Stock - $150,000

Paid-in Capital from Treasury Stock Transactions - $15,000

If the company resells Treasury Stock that originally cost $50,000 for $40,000.

$40,000< $50,000 implies reduction in paid-in capital from treasury stock.

i.e. Reduced Paid-in Capital from Treasury Stock Transactions = $50,000- $40,000

= $10,000

So, if the company resells Treasury Stock that originally cost $50,000 for $40,000, then paid-in capital from treasury stock transactions is reduced by $10,000.

Other Questions
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