Bacon Signs purchases a machine for $70,000. The machine qualifies as a 5-year recovery asset under MACRS with rates for years 1,2,3 and 4 repectively at: 20%, 32%, 19.2% and 11.52%. The firm has a tax rate of 40%. If the machine is sold at the end of 2 years for $50,000, what is the cash flow from disposal?

Assume the government imposes a $2.25 tax on suppliers, which results in a shift of the supply curve from s1 to s2. the price the seller receives for the product after paying the tax is

Aprice ceiling is “binding” if the price ceiling is set below the equilibrium price. suppose that the equilibrium price is $5. if a price ceiling is set at $6, this will not affect the market in any way since $5 remains a legally allowable price (since $5 < $6). a price ceiling of $6 is called a “non-binding” price ceiling. on the other hand, if the price ceiling is set at $4, the price ceiling is “binding” because the natural equilibrium price is $5 but that is no longer allowed. what happens when there is a binding price ceiling? at a price below the equilibrium price, quantity demanded exceeds quantity supplied. there is a shortage. normally, price increases eliminate shortages by increasing quantity supplied and decreasing quantity demanded. in this case, however, price increases are not allowed past the price ceiling. we therefore predict that the observed market price will be right at the price ceiling and there will be a permanent shortage. the observed quantity bought and sold will be dictated by the quantity supplied at the price ceiling. although consumers would like to buy more, there are no more units for sale

Blue spruce corp. has the following transactions during august of the current year. aug. 1 issues shares of common stock to investors in exchange for $10,170. 4 pays insurance in advance for 3 months, $1,720. 16 receives $710 from clients for services rendered. 27 pays the secretary $740 salary. indicate the basic analysis and the debit-credit analysis.