New companies and those with volatile earnings and uncertain cash flows generally prefer defined-contribution plans to defined-benefit plans.
Answer the following statement true (T) or false (F)
True
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A bank has reserves of $34.3 million, securities of $65.2 million, and loans of $287.5 million. It has transaction accounts totaling $357.7 million and capital of $29.3 million. The reserve requirement is 0 percent on the first $7 million of transaction accounts, 3 percent on transaction accounts from $7 million to $47 million, and 10 percent on transaction accounts above $47 million.
a.Draw up the bank's balance sheet and calculate the bank's excess reserves. b.Suppose the bank makes a loan equal to the amount of its excess reserves that you calculated in part a. Draw up the bank's balance sheet before the customer spends the proceeds of the loan. What are the bank's excess reserves? c.Now suppose the customer spends the proceeds of the loan. Draw up the bank's balance sheet and calculate its excess reserves. What will be an ideal response?
Which of the following assets is not subject to depreciation?
a. Store fixtures b. Art equipment c. Land d. Computers
If a company experiences a liquidation of a LIFO inventory layer in the second quarter that is expected to be restored by the end of the annual financial reporting period, the company should
a. treat the layer as if it were liquidated and include in cost of goods sold the expected replacement cost of the inventory sold. b. deplete the LIFO layer as if the interim period were an annual period. c. change to an alternative inventory cost method, such as FIFO, so that the problem of LIFO liquidation is not encountered. d. delay the recognition of both revenue and cost of goods sold on the inventory involved until a final determination of the LIFO inventory can be made at the end of the annual period.
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Indicate whether the statement is true or false