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Realty Corporation, an accrual-basis, calendar-year corporation, agrees to rent office space to Tenant Company for $3,000 per month beginning on January 1, year 2. On December 15, year 1, Tenant gives
At the end of October, year 1, Specialty Training, an accrual-basis, calendar-year taxpayer, was hired by Dunbar Company to provide a six-week training program for its employees. Specialty was paid it
Beta Corporation received permission to change its tax year from a calendar year to a year ending August 31. Its income for the eight months ended August 31 is $96,000.
While walking through the park, Jane finds a $100 bill. No one is around to claim it, so she keeps it. Does Jane have any gross income as a result of this?
In year 1, Lauderhill Corporation issues three-year bonds. Martha, a cash basis taxpayer, purchased a $10,000 bond at its issue price of $7,000. In year 1, $840 of the interest accrues.
Virginia gives her 14-year-old grandson, Tommy, $10,000 in common stock. One month later, a $100 dividend is paid to Tommy on the stock. How much income is taxed to
Ryan's annual salary is $120,000 per year. He asked his employer to pay $20,000 of his salary to his elderly grandmother who is in a nursing home. The employer makes the $20,000 payment directly to th
What is an installment sale? If a transaction qualifies for installment sale treatment, when will the taxpayer be taxed on the sale? What does a taxpayer do if the taxpayer does not want to use the in
Murphy Company, a cash-basis, calendar-year taxpayer, received a call on December 28, year 1, from a client stating that a check for $9,000 as payment in full for their services could be picked up at
Jabba Company uses the cash method of accounting. Jabba received a computer from a customer as payment for a $2,000 bill. Can Jabba avoid recognizing income because it received payment in a noncash fo
Michelle (a calendar year individual) begins a new business as a sole proprietorship. She would like to use an October 31 fiscal year end for her business because the calendar year ends during her bus
The university has built a new parking garage. There is always an available parking spot, but it costs $1 per day. Before the new garage was built, it usually took 15 minutes of cruising to find a par
An owner can lease her building for $120,000 per year for three years. The explicit cost of maintaining the building is $40,000, and the implicit cost is $55,000. All revenues are received
Why does a prospective monopolistic competitor find it relatively easy to start production in the long run?
What are some of the natural and artificial barriers to entry into oligopolistic industries?
Why do firms demand resources? In what way is a firm’s demand for a resource a derived demand? How does this differ from consumers’ demand for final commodities?
Define marginal revenue. How is it calculated? Why is marginal revenue constant and equal to price under perfect competition?
Should the government break up a monopoly into a large number of perfectly competitive firms? Why?
What is the relationship of the cost of producing output and the money receipts of businesses when there are only consumer expenditures? What should happen to the level of output?
Variables other than the rate of interest affect gross investment. Changes in these other variables cause investment demand to shift downward or upward. What should happen to the economy’s inves
What effect does unanticipated inflation have upon: (1) individuals who are retired and living on a fixed income; (2) debtors, and (3) creditors?
How do the following events affect an aggregate spending line?
Find the change in the equilibrium level of output when there is a $10 increase in net export spending and the MPC =0.50, 0.75, and 0.80.
Is there backing for coins, paper currency, and check-writing deposits?
What factors may limit the actual increase in aggregate demand? b. An increase in aggregate demand should raise equilibrium output.