Splish Brothers Inc. purchased equipment on January 1, 2021 for $171,000. It is estimated that the equipment will have a $9,500 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 190,000 units over its 5-year life. Answer the following independent questions.

Compute the amount of depreciation expense for the year ended December 31, 2021 using the straight-line method of depreciation. Straight-line method

If 16,000 units of product are produced in 2021 and 24,000 units are produced in 2022, what is the book value of the equipment at December 31, 2022? The company uses the units-of-activity depreciation method. Book value at December 31, 2022

If the company uses the double-declining-balance method of depreciation, what is the balance of the Accumulated Depreciation- Equipment account at December 31, 2023? Accumulated Depreciation-Equipment

Answers

Answer 1

The depreciation expense for the year ended December 31, 2021, using the straight-line method of depreciation, would be $30,900.

The book value of the equipment at December 31, 2022, using the units-of-activity depreciation method, would be $156,600.

If the company uses the double-declining-balance method of depreciation, the balance of the Accumulated Depreciation-Equipment account at December 31, 2023, would be $102,600.

Splish Brothers Inc. purchased equipment for $171,000 on January 1, 2021, with an estimated salvage value of $9,500 at the end of its 5-year useful life. To calculate the depreciation expense for the year ended December 31, 2021, using the straight-line method, we need to determine the annual depreciation amount. Since the equipment has a useful life of 5 years, the annual depreciation would be ($171,000 - $9,500) / 5 = $32,900. However, since the equipment was purchased on January 1, 2021, we need to prorate the depreciation expense for the year. With 12 months in a year, the depreciation expense for 2021 would be ($32,900 / 5) × (12 / 12) = $30,900.

Next, using the units-of-activity depreciation method, we need to calculate the book value of the equipment at December 31, 2022. The units-of-activity method allocates depreciation based on the actual usage or production of the equipment. Since 16,000 units were produced in 2021 and 24,000 units were produced in 2022, the total units produced over the two years would be 16,000 + 24,000 = 40,000 units. The depreciation per unit would be ($171,000 - $9,500) / 190,000 units = $0.90 per unit. Therefore, the depreciation expense for 2021 would be $0.90 × 16,000 units = $14,400, and the book value at December 31, 2022, would be ($171,000 - $14,400) = $156,600.

Lastly, if the company uses the double-declining-balance method, which is an accelerated depreciation method, we need to determine the depreciation rate. The depreciation rate for double-declining-balance is twice the straight-line rate, which would be 2 × (1 / 5) = 40% per year. In the first year, the depreciation expense would be $171,000 × 40% = $68,400. To calculate the balance of the Accumulated Depreciation-Equipment account at December 31, 2023, we need to subtract the accumulated depreciation from the initial cost of the equipment. Since the accumulated depreciation at December 31, 2022, using double-declining-balance would be $68,400, the balance at December 31, 2023, would be ($171,000 - $68,400) = $102,600.

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Related Questions

what is the importance of inference, psychological safety, and team effectiveness in the design thinking process?

Answers

Design thinking encourages collaboration, flexibility, curiosity, and positivity, creating happy teams and positively influencing the outcome. Through this process, team members feel valued and clients know that their feedback is taken into consideration.

Design is an art shape, a method of human expression that follows a gadget of tremendously evolved processes so that you can imbue objects, performances, and experiences with significance. like any artwork bureaucracy, the layout has the capacity to clear up issues, but there may be no guarantee that it's going to.

An critical part of the definition of the word layout is the reason: to intend for a particular motive, to assign in notion or purpose; a reason or plan of action. design without motive is design without that means or purpose. We accept as true with without a cause there's no design. An instance of design is a plaid sample on a pair of pants.

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What is the main function of a business?​

Answers

Manufacture of specific goods or the supply of specific services

A company sells 800 units at $16 each, has variable costs of $12 per unit, and fixed costs of $1,200. Income is $

Answers

Assuming a company sells 800 units at $16 each, has variable costs of $12 per unit. The after-tax income is $1,200.

After-tax income

Using this formula

After-tax income=(Selling units×Selling price)-[(Variable costs×Selling price)+Fixed costs]×(1- tax rate)

Let plug in the formula

After-tax income=(800 units× $16 each)-[(800 units × $12 each)+$1200]×(1-.40)

After-tax income=$12,800-($9,600+$1,200)×0.60

After-tax income=$12,800-$10,800×0.60

After-tax income=$2,000×0.60

After-tax income=$1,200

Inconclusion the after-tax income is $1,200.

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You must consider the physical aspects of different work environments when choosing a career.

Responses

False
True

Answers

True you must consider the physical aspect of different work environments when choosing a career

Answer: True.

Explanation: If you choose a career without knowing about the environment you’ll be in, or the impact it will have on your well-being, you’re setting yourself up for a miserable lifestyle. It’s common sense to find out more about the career you want to peruse.

A firm has 15 million shares outstanding with a market price of $20 per share. The firm has $30 million in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt. What is the firm's value of operations after the repurchase

Answers

The firm's value of operations after the repurchase is $270 million.

To calculate the firm's value of operations after the repurchase, we first need to determine the total market value of the firm before the repurchase. This can be calculated by multiplying the number of outstanding shares by the market price per share:

Total market value of the firm before repurchase = 15 million shares x $20 per share = $300 million

Next, we need to subtract the amount of cash that the firm plans to use for the stock repurchase from the total market value:

Total market value of the firm after repurchase = $300 million - $30 million = $270 million

Since the firm has no other financial investments or debt, its value of operations after the repurchase would be equal to the total market value of the firm after the repurchase, which is $270 million.

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Choosing to go to college over getting a job right out of high school is an example of a(n) _____.


fixed cost

opportunity cost

variable cost

none of the above

Answers

Answer:

none of the above

Explanation: to get a job you have to get a degree

Answer:

opportunity cost

Explanation:

Edge 2020

did you receive any distributions from a retirement plan after 2014?

Answers

As an AI language model, I don't have personal experiences or financial transactions, including receiving distributions from a retirement plan. I don't have access to personal data or the ability to interact with financial systems. My purpose is to provide information and answer questions based on the knowledge I have been trained on, up until September 2021. It's important to note that specific financial transactions and personal information should be handled and discussed with a qualified financial advisor or relevant financial institutions.

As an AI language model, I don't have the capability to receive distributions from a retirement plan or any other financial transactions. I don't possess personal accounts or engage in financial activities. My purpose is to provide general information and answer questions based on the data and knowledge I have been trained on. If you have any specific questions or concerns about retirement plans or financial matters, it is recommended to consult with a qualified financial advisor or contact the relevant financial institutions for accurate and personalized guidance.

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As an AI language model, I don't have personal experiences or financial transactions, including receiving distributions from a retirement plan. I don't have access to personal data or the ability to interact with financial systems. My purpose is to provide information and answer questions based on the knowledge I have been trained on, up until September 2021. It's important to note that specific financial transactions and personal information should be handled and discussed with a qualified financial advisor or relevant financial institutions.

As an AI language model, I don't have the capability to receive distributions from a retirement plan or any other financial transactions. I don't possess personal accounts or engage in financial activities. My purpose is to provide general information and answer questions based on the data and knowledge I have been trained on. If you have any specific questions or concerns about retirement plans or financial matters, it is recommended to consult with a qualified financial advisor or contact the relevant financial institutions for accurate and personalized guidance.

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Whether speech is going to be delivered before one or one hundred people, the speaker should:
a.
Concentrate on getting everything out quickly
b.
Imitate the mannerisms of great speakers
c.
Prepare their thoughts in advance
d.
Use their biggest vocabulary to sound educated

Answers

Answer:

C). Prepare their thoughts in advance.

Explanation:

A speaker aims to serve a specific purpose through his/her speech(to inform, to entertain, to convince, to motivate, etc.). In order to serve this purpose effectively by the end of the speech, it is very crucial to 'prepare the thoughts that the speaker wishes to convey in advance' as it helps him/her in organizing the thoughts in a logical order to ensure its efficacy. It also assists in analyzing whether the thoughts get along with each other and also keeps room for creativity which can enhance its impact and make the purpose more successful. Thus, be it one or one hundred people, it is important for a speech to be prepared in advance and hence, option C is the correct answer.

Answer:

C). Prepare their thoughts in advance.

Explanation:

e d g e

what are some of the consequences of the trump administration's imposition of tariffs on steel, according to the memo? a net job gain, with the increase in jobs in the steel industry outpacing the loss of jobs in steel-using industries. increased uncertainty about future economic conditions, leading firms to put investment and hiring plans on hold. significant job losses in industries that use steel as an input. a decline in the global competitiveness of u.s. firms that use steel as an input.

Answers

A decline in the global competitiveness of u.s. firms that use steel as input is some of the consequences of the trump administration's imposition of tariffs on steel, according to the memo.

So, the correct option is D.

The president's proclamation claims that the rise in inputs of these derivatives has "neatly eroded the customer base for U.S. manufacturers of aluminum as well as steel," working against guarding producers of aluminum and steel. Steel prices will rise due to tariffs, raising businesses' expenses. Increased prices will come from higher costs, which will decrease sales and perhaps result in job losses.

Real income in the United States decreased as a result of Trump's tariffs, which also had a negative impact on GDP. Tariffs on the importation of steel and aluminum increased the cost of manufacturing for producers, decreasing employment in those sectors, increasing consumer prices, and harming exports.

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Wine and roses, incorporated, offers a bond with a coupon of 8. 5 percent with semiannual payments and a yield to maturity of 8. 34 percent. The bonds mature in 17 years. What is the market price of a $1,000 face value bond?.

Answers

The market price of a $1000 face value bond is $1,059.32

What is market price?

It is determined using the current interest rate compared to the interest rate stated on the bond. The market price of the bond comprises two parts. The first part is the present value of the bond's face value. The second part is the present value of the bond's interest payment.

How to calculate market price?

Par / Face Value of the bond = $1000

Semi annual coupon payment

= par value * coupon rate * 1 / number of coupon payments per year

= $1000 * 8.5% * 1/2
= $42.5

Number of coupon payments (n)
= Years to maturity * number of coupon payments per year
= 17 * 2

= 34

Semi Annual Yield (YTM)

= yield to maturity / number of coupon payments per year

= 0.0834 / 2

= 0.0417

Now, let's calculate the current market price of bond

Price = Coupon payment *(1-(1+YTM)^-n)/YTM + Face Value / (1+YTM)^n
= 45 * \(\frac{(1-(1+0.0417)^{-34})}{0.0417} + \frac{1000}{(1+0.0417)^{34} }\)

= 45 * \(\frac{(1-0.2493155798)}{0.0417} + \frac{1000}{4.010980785}\)
= 45 * 18 + 249.31557981

= 810 + 249.31557981
= $1,059.32 (rounded)


So the bond's current market price of wine and roses, Inc. is $1,059.32

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What does the phrase "like animals escaped from their caves" imply about the sun's impact on the children?

Answers

the sun being out causes children to come outside and “escape from their homes” to enjoy the sun. without the sun (rain or cloudy weather), children will most likely stay inside

4. Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The average vehicle sells for 27,730 and has a margin of 8. Based on historical averages, 81 of people buying a new vehicle at Eastern will return for service 9 times over the next 5 years. Though it varies considerably, Eastern generates approximately 85 in margin on each service visit after accounting for parts and direct labor costs. Assume the 5 year value of the service component is $475.

Answers

The average CLV over a 5-year time horizon for a customer who purchases a new vehicle at Eastern Motors Auto Dealership is $29,051.85.

The customer lifetime value (CLV) can be determined by calculating the total revenue generated by a customer over the entire duration of their relationship with the company, minus the costs incurred in serving the customer. This value is an estimate of the net profit generated by the customer over the time horizon. Here, we will calculate the average CLV over a 5-year time horizon for a customer who purchases a new vehicle at Eastern Motors Auto Dealership. Given,
The average vehicle sells for $27,730 and has a margin of 8%.
That is, the cost of the vehicle to the dealership is (100-8)% of $27,730
= 92% of $27,730
= $25,477.60.
Assuming that 81% of people buying a new vehicle at Eastern will return for service 9 times over the next 5 years, the revenue generated from service visits per customer is:
Revenue per customer from service visits = 81% of 9 × $85 = $619.65.
Thus, the total revenue generated from service visits per customer over the 5-year horizon is:
Total revenue generated from service visits per customer = $619.65 × 5 = $3,098.25.
Assuming that the 5-year value of the service component is $475, the total revenue generated per customer from purchasing a new vehicle at Eastern is:
Total revenue per customer = $25,477.60 + $3,098.25 + $475 = $29,051.85.
The average CLV over a 5-year time horizon for a customer who purchases a new vehicle at Eastern Motors Auto Dealership is $29,051.85.


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Why do lenders often require a down payment when credit is used to purchase a good?

It reduces risk to the lender.
It eliminates interest charges.
It reduces the cost of the financed good.
It increases the cost of financing the good.

Answers

It is A hope this helps

The payments are done through a down payment reduces the risk to the lender and therefore the lender requires down payments when credit is used to purchase a good. Thus (A) is the correct option.

What is a down payment?

The amount of money that a purchaser pays on the purchasing of any expensive object. The down payment showcases a portion of the total purchasing amount.

It is made in the initial stage of purchasing. It reduces the risk of the lender and therefore, (A) is the correct option.

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Which section of a business plan gives details about a business’s core products and services?
The section of a business plan talks about a business’s core products and services, and their features and benefits to the consumers.

Answers

Answer:

Executive summary.

Explanation:

A business plan can be defined as a formally written document that comprises of the financial and operational objectives (plans) of a business firm.

Basically, a business plan is a roadmap or guide that outline the goals of a business, methods on how to achieve those goals, and the timeframe required to achieve those goals.

A business plan should be written in such a way that it comprises of all the important informations that an investor looks out for, in order to convince him or her to invest money in the business. Thus, the main section (contents) of a business plan include the following;

I. Title page.

II. Market analysis and competition.

III. Industry overview.

IV. Operating plan.

V. Sales and marketing plan.

VI. Financial plan.

VII. Management plan.

VIII. Appendices and exhibits.

IX. Executive summary.

The executive summary section of a business plan talks about a business’s core products and services, and their features and benefits to the consumers. Thus, the executive summary is the most important section of a business plan because it provides a concise summary of the business and it's the first section to be seen by an investor.

1. Which of the following poses a challenge for consumer-to-consumer sites?
a. Gain consumer awareness
b. Increasing the need for people to advertise sales in local newspapers
c. Limiting the services that can be offered to consumers
d. Expanding the number of potential buyers
2. Which of the following has NOT been impacted by digital and mobile marketing programs?
a. Where and when consumers research products, companies, and brands
b. The ability to touch and feel a product
c. How consumers receive the products they purchase
d. Where and when consumers purchase products
3. One of the major advantages of e-commerce over brick-and-mortar stores is ______.
a. no need for local staff
b. ability to reach consumers worldwide
c. lack of legal export and import constraints
d. ease of shipping
4. What is the difference between paid search insertions and paid search ads?
a. Paid search ads include text boxes or display ads that pop up when a specific word is typed in the search box.
b. Companies do not pay a premium for paid search insertions.
c. Paid search insertions do not focus on certain products.
d. Paid search insertions are not usually identified as such to the consumer.
5. Mobile devices incorporate features through GPS, beacon, or NFC (near field communication) technologies to help with
a. enhancing the customer engagement process
b. geo-location
c. capturing demographic data
d. voice recognition
6. In what ways does mobile differ from other media?
a. It does not allow for video or camera technology.
b. It is usually used by multiple people and encourages two-way communication.
c. It is personal and offers geo-location and voice recognition.
d. It is personal but does not offer tracking features.

Answers

Answer: 1). A gain consumer awareness

Explanation: The site itself must gain consumer awareness and confidence to succeed

1. Limiting the services that can be offered to consumers poses a challenge for consumer-to-consumer sites. Consumer-to-consumer (C2C) websites are growing in popularity among people who are looking to buy and sell goods and services.

2. The ability to touch and feel a product has NOT been impacted by digital and mobile marketing programs. The impact of digital and mobile marketing programs has been significant, and it has changed the way that consumers research, purchase, and receive products.

3. The ability to reach consumers worldwide is one of the major advantages of e-commerce over brick-and-mortar stores. One of the biggest advantages of e-commerce over brick-and-mortar stores is the ability to reach consumers worldwide. With an e-commerce website, businesses can sell their products to consumers all over the world, without having to open physical stores in different locations.

4. Paid search ads include text boxes or display ads that pop up when a specific word is typed in the search box. This is the difference between paid search insertions and paid search ads. Paid search insertions are when companies pay to have their website inserted into the search results, without paying for a premium ad spot.

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Do you think careers in computer graphics and animations are more artistic or more technical? Explain your answer

Answers

I think careers in computer graphics and animations are more artistic than technical and this is because computer graphics and animations need a lot of visualization and artistry.

What is Computer Graphics Animation?

Computer Graphics is a type of graphics which involves generating images with the aid of a computer. This concept of computer graphics plays an integral role in the technology of today and that of the future. It is based on this that several aspects of digital photography, film, video games, cell phone and computer displays are produced.

   Computer animation involves the process of manipulating images on a computer to create a moveable object. This type of technology is the bases for producing moveable objects such as in filmography.

  Computer Graphics and animation is more artistic than technical because it involves a lot of artistry, visualization and imagination to put together a fine work of graphics.

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The fallacy of composition involves assuming that: a. you can determine the composition of a complex product just by examining its exterior properties. b. what was true when a person was young will still be true today. c. any mistakes made in producing a product using an assembly line technique will lead to a compounding of errors as the product moves down the line. d. what is true for any individual component in a group is true for the group as a whole. e. consumer durable goods today do not last as long as they did a generation ago.

Answers

Answer:

d. what is true for any individual component in a group is true for the group as a whole.

Explanation:

Fallacy can be defined as a mistaken or false belief that are based on illogical arguments or reasoning.

However, a lot of people might actually think it to be true but it isn't. There are various types of fallacy and these include; black or white, non sequitur, ad hominem, bandwagon, appeal to authority, straw man, fallacy of composition, and oversimplification or hasty generalization.

Fallacy of composition can be defined as the error of assuming that what is true of an audience is true for the group of people as a whole.

Hence, the fallacy of composition involves assuming that what is true for any individual component in a group is true for the group as a whole.

Which step is the most important step in the decision making process?.

Answers

Answer:

The most important step of the decision-making process is: Assessing the possible uncertainties in the future course of action. It is a must for any of the firms to assess or evaluate the possible risks or the uncertainties associated with the firm operation and functioning.

The function of marketing that tells customers where they can buy the product and how the product gets there is called

Answers

Answer:

Place, where the consumer/customer can go when making a purchase on a product.

Explanation:

Good luck, I majored in Business Management

Who sets the price in a monopolistic competition?

Producers and consumers
Consumers only
Government
Producers only

Answers

Answer:

Consumers and producers

Explanation:

so A on edg 2021

The Producers and consumers set the  price in a monopolistic competition.

What is a monopolistic competition?

This is a competition that occurs in the market place due to the fact that there are a lot of firms offering similar products that are not identical.

In this type of market the price setting is done by those that consume the products and the product makers.

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when did the electric guitar and electric bass displace the saxophone and acoustic bass? a. 1960s b. 1950s c. 1930s and. 1940s

Answers

The electric guitar and electric bass started out to displace the saxophone and acoustic bass in the B) 1950s.

The emergence of rock and roll tune inside the mid-1950s popularized the use of the electric guitar because the primary tool for lead and rhythm components. the electrical bass guitar, which turned into a variant of the conventional double bass, also have become increasingly popular because it provided a more powerful and flexible sound.

In comparison, the saxophone and acoustic bass started to be considered as old units in popular track. however, it is vital to observe that the saxophone and acoustic bass persevered to be broadly utilized in different genres of tune together with jazz, wherein they remained popular and indispensable to the sound of the genre.

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PLEASE HELP ASAP!!! Which statement describes a strategy for improving ones organization and time management at work ?

PLEASE HELP ASAP!!! Which statement describes a strategy for improving ones organization and time management

Answers

The answer is the 3rd one.

My explanation would be that the other reasons listed are for personal use such as friends birthdays, music, and a new clock, but the third answer is listing things appropriate for a business.

Hope I helped !

Answer:

C

Explanation:

two document uesd in home trade

Answers


Documents used in Home Trade
Enquiry Letter Making an enquiry.
Reply Letter.
Order Letter Ordering goods.
Acknowledgement Letter.
Invoice Invoice.
Receipt of goods.
hope this helps!! <3

Why is it necessary to include your family's income and tax information on
a fafsa application?

Answers

Answer Including your stepparent's information on the FAFSA form helps create an accurate picture of your family's total financial strength

3. Which of the following is NOT an example of a violation of professional ethics?

Answers

Ummm we need more of the question

Coming to a school activity after participating in happy hour with colleagues is not an example of a violation of professional ethics.

What is professional ethics?

Professional ethics encompass the personal and corporate standards of behaviour expected of professionals. The word professionalism originally applied to vows of a religious order. By no later than the year 1675, the term had seen secular application and was applied to the three learned professions, they are divinity, law, and medicine. The term professionalism was also used for the military profession around this same time.

Professionals and those working in acknowledged professions exercise specialist knowledge and skill. The use of this knowledge should be governed when providing a service to the public can be considered a moral issue and is termed professional ethics. It is capable of making judgments, applying its skills, and reaching informed decisions in situations that the general public cannot because they have not attained the necessary knowledge and skills.

One of the earliest examples of professional ethics is the Hippocratic oath to which medical doctors still adhere to this day.

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Please help?? WILL MARK IF THERE ARE MULTIPLE ANSWERS!!!!!

Please help?? WILL MARK IF THERE ARE MULTIPLE ANSWERS!!!!!

Answers

High school probably

value creation through place decisions for a consumer product involves

Answers

Value creation through place decisions for a consumer product involves placing the product in a location that would enhance the product's marketability. This means that the marketer would strategically select the distribution channel through which the product would be sold in order to maximize its visibility and accessibility to potential customers. Furthermore, the marketer would also ensure that the distribution channel selected is cost-effective, efficient, and can reach the target audience.The marketer would conduct extensive research on potential distribution channels such as retail stores, online platforms, or direct mail, and select the most suitable one. This could involve creating a website or social media page for the product in question to enhance its visibility. The marketer would also ensure that the product is available at locations that are easily accessible to the target audience to improve the likelihood of purchase.Placing the product in a location that is not easily accessible would reduce its marketability and could result in losses for the business. Therefore, effective place decisions require extensive research, market analysis, and strategic planning to enhance the product's value creation. The placement strategy selected should align with the company's overall marketing strategy and contribute to the achievement of the company's objectives.

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Your office is hosting a big meeting with some of its international
clients. During the meeting, one of the clients asks numerous,
very detailed questions. She also wants to see your risk
management plan. Which of these countries is she probably
from?
O Mexico
O United States
O Germany
O Ireland

Answers

Untied states or Mexico

d. what is kiyara's additional medicare tax liability (include all earned income in computing the tax)?

Answers

$450. [0.009 × ($250,000 salary minus $200,000 threshold)]. Kiyara's only earned income is her $250,000 salary.kiyara's additional medicare tax liability (include all earned income in computing the tax).

Taxpayer payments to the Social Security Administration cover the cost of Medicare. 1.45% of total wages are paid by employees to the Federal Insurance Contributions Act (FICA). Employers contribute an additional 1.45 percent, bringing the total to 2.9 percent of your gross income. The American Medicare health system is financed by a Medicare levy. Medicare Part A, which provides tax hospital insurance for seniors and those with disabilities, is paid for using tax dollars. Hospital, hospice, and nursing facility care are all included in Part A expenditures. In 2022, the Medicare tax will be 2.9%. Each party pays 1.45% of this sum, which is divided equally between the employer and the employee. The sum is deducted from each employee's paycheck.

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according to the quantity theory of money, the inflation rate would be 0% if the real gdp grows by 2%, the velocity of circulation remains constant, and the quantity of money grows by %.

Answers

According to the quantity theory of money, the inflation rate would be 0% if the quantity of money grows by 2% when the real GDP grows by 2%, and the velocity of circulation remains constant.

The quantity theory of money states that the general price level in an economy is directly proportional to the quantity of money in circulation. In equation form, it can be expressed as: MV = PQ, where M represents the quantity of money, V represents the velocity of circulation, P represents the price level, and Q represents the real GDP.

In this scenario, it is assumed that the real GDP grows by 2%, which means that the Q in the equation increases by 2%. If the velocity of circulation remains constant, then V does not change. To keep the inflation rate at 0%, the increase in the quantity of money (M) must be equal to the increase in real GDP (Q). Therefore, the quantity of money should also grow by 2%.

When the quantity of money grows at the same rate as real GDP, the ratio of M/Q remains constant. As a result, the price level (P) remains unchanged, and there is no inflation. In other words, the increase in money supply is matched by the increase in the production of goods and services, leading to a stable price level.

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