Accounting Equation Case Discussion Homework Help
- November 28, 2017
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- Category: Accounting
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1. Approval of Foreign Investment Applications – This questions needs – Facts, Issue, Holding, Law, Argument and Conslusion. Overseas Investment Co. (OIC), a multinational enterprise with its headquarters in State W, entered into a joint venture with Investment Promotions Facility, Ltd. (IPF), a state-owned company whose board of directors and principal officers had been appointed by the minister of finance of State X. The joint venture agreement provided that, in the event of any dispute, the dispute would be resolved by arbitration. Additionally, because the law of State X says that all foreign investment agreements must be approved by the minister of finance, the minister was present at the signing of the agreement; and after representatives of the two parties put their signatures on the document, the foreign minister added the words “approved and ratified” and his own signature. Unfortunately, a dispute did arise, and OIC initiated an arbitration proceeding according to the procedures set out in the joint venture agreement, naming both IPF and State X as parties, State X responded by arguing that the arbitration tribunal has no jurisdiction over it. Should State X be excused from participating in the suit? Discuss
2. A student association has hired a music group for a graduation party. The cost will be a fixed amount of €40 000.
a. Suppose 500 people attend the party. What will be the total cost of the music group?
b. The unit cost per person?
c. Suppose 2000 people attend. What will be the total cost of the music group?
d. The unit cost per person?
For prediction of total costs, should the manager of the party use the total cost in requirement a and c or the unit cost in requirement b and d?
What is the major lesson of this problem?
3. Both population and the work force grow at the rate of n = 1% per year in a closed economy. Consumption is C = 0.5(1 – t)Y, where t is the tax rate on income and Y is total output. The per-worker production function is y = 8vk, where y is output per worker and k is the capital–labor ratio. The depreciation rate of capital is d = 9% per year. Suppose for now that there are no government purchases and the tax rate on income is t = 0.
a. Find expressions for national saving per worker and the steady-state level of investment per worker as functions of the capital–labor ratio, k. In the steady state, what are the values of the capital– labor ratio, output per worker, consumption per worker, and investment per worker?
b. Suppose that the government purchases goods each year and pays for these purchases using taxes on income. The government runs a balanced budget in each period and the tax rate on income is t = 0.5. Repeat Part (a) and compare your results
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4. Illustrate the construction of account equation based on the following john started business with cash of 25,000,000.
5. You are a public accountant with many small business clients.
During a recent visit to a client’s business, the bookkeeper approached you with a problem. The columns of the trial balance were not equal. You helped the bookkeeper find and correct the error, but believe you should go one step further.
What information can you tell your clients about the purpose of the double entry framework, the importance of maintaining the equality of the accounting equation, errors that might cause an inequality, and suggestions for finding errors?
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