Exploring Macroeconomics
7th Edition
ISBN: 9781285859446
Author: Sexton, Robert L.
Publisher: Cengage Learning
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Question
Chapter 4, Problem 6P
To determine
(a)
The effect of the
To determine
(b)
The effect of the expected price of Chevrolets to rise in future on the demand for Chevrolets in U.S.
To determine
(c)
The effect of the rise in the income of Americans on the demand for Chevrolets.
To determine
(d)
The effect of the fall in the price of gasoline on the demand for Chevrolets.
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Jim's Bank Account for the Year to 30 April 2008:
We will start by calculating the balance of the business bank account, using the transactions provided.
Opening Balance:
Jim initially deposited €150,000 into his business bank account on 1 May 2007.
Transactions:
Receipts:
Cash Sales (May 2007 to April 2008): €96,000
Credit Sales (Business customers): €19,600 (Note: This amount is not yet received as it is on credit, but it will be included in the Income Statement and not the bank balance at this stage.)
Bank receipts from credit customers (amount owed at 30 April 2008): €6,800
Total Receipts:€96,000 (Cash Sales) + €6,800 (credit customer payments) = €102,800
Payments/Expenditures:
Lease Payment (Paid in advance for five years): €50,000
Shop Fitting: €10,000
Assistant’s Wages: €250 per month × 12 months = €3,000
Telephone expenses: €800
Heat & Light expenses: €1,000
Jim’s withdrawals for personal expenditure: €1,000 × 12 months = €12,000
Accounting Fee (after the year-end):…
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Exploring Macroeconomics
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