Dogtopia sells pet supplies and food and handles all sales with a cash register. The cash register displays the amount of the sale. It also shows the cash received and any change returned to the customer. The register also produces a customer receipt but keeps no internal record of the transactions. At the end of the day, the clerk counts the cash in the register and gives it to the cashier for deposit in the company bank account.Requirements1. Identify the internal control weakness over cash receipts.2. What could you do to correct the weakness?
Answers
Explanation:
1- Identify the internal control weakness over cash receipts.
Internal control helps the organization to follow company policy and consequently to maintain the ideal standard established by the organization. Through this instrument, it is possible to obtain more efficiency and effectiveness in operations, in addition to increasing the reliability of financial statements, preventing possible fraud.
2-What could you do to correct the weakness?
The ideal would be to implement an internal sales record tape at the cash register, and at the end of the day to count the sales money and compare it to the results shown by the tape.
The registration tape would then be forwarded to the company's accounting department, so that the money and sales were recorded in the accounting diaries, which would increase internal control and guarantee the reliability of the processes.
Related Questions
Mr. Johnnie B. Good has a furniture business which he operates as a sole proprietor. The business has been doing well for several years and now he wants to finance the expansion of his business by way of a loan and he is thinking of approaching BCN Bank accordingly. He is also planning to buy a great deal of raw material on credit from Miller’s Hardware in support of the business expansion. Mr. Good in looking at the potential risks to his personal assets and in an effort to safeguard himself from losing his personal assets if the business failed and was not able to repay the loan or pay for the material he got on credit, filed the relevant documents with the companies office and incorporated a private company, Good Furniture Ltd, with him as the sole shareholder and director and then went ahead and obtained a loan in the company’s name from the bank and bought the raw material on credit on behalf of the company. The bank in providing the loan ensured that Mr. Good signed a personal guarantee for the entire loan amount.
Shortly after receiving the loan and the material on credit, the business faced severe competition from other furniture stores who imported much cheaper furniture and so the business failed and had no business assets to cover the loan or to pay for the material taken on credit.
BCN Bank and Miller’s Hardware both sue to recover their respective amounts and each is seeking to get a court order to have Mr. Good sell his personal assets to meet the obligations of Good Furniture Ltd. Both Claimants are contending that the ‘one man’ company is merely a shield to what is in essence a sole proprietorship business.
Using case law and statute, advise Mr. Good as to the likelihood of success of:
A) Miller’s Hardware
B) BCN Bank
Answers
A) Miller's Hardware: Unless Miller's Hardware can prove fraudulent intent or abuse of the corporate form, it's unlikely to hold Mr. Good personally liable.
B) BCN Bank: Mr. Good's personal guarantee strengthens BCN Bank's chances of success in recovering the loan amount from his personal assets.
Mr. Good's situation involves the concept of piercing the corporate veil, which refers to disregarding the separate legal personality of a corporation to hold its shareholders personally liable. In this case, Miller's Hardware and BCN Bank are seeking to hold Mr. Good personally liable for the debts of Good Furniture Ltd. Let's analyze the likelihood of success for each claimant:
A) Miller's Hardware:
To determine the likelihood of success for Miller's Hardware, we need to consider the circumstances under which the court may pierce the corporate veil. The court will generally pierce the corporate veil if it can be shown that the company is merely an alter ego or a sham used to avoid legal obligations.
Factors considered include commingling of assets, inadequate capitalization, failure to follow corporate formalities, and fraud.
In this case, since Mr. Good incorporated Good Furniture Ltd as a separate legal entity, it demonstrates an intention to operate as a company rather than a sole proprietorship.
Unless Miller's Hardware can provide evidence of fraudulent intent or other factors indicating abuse of the corporate form, the court is unlikely to pierce the corporate veil. Therefore, Miller's Hardware may face challenges in holding Mr. Good personally liable.
B) BCN Bank:
BCN Bank has an advantage over Miller's Hardware because Mr. Good signed a personal guarantee for the loan, assuming personal liability. A personal guarantee is a legally binding agreement, and it can override the protection of limited liability that a corporation provides.
As long as the personal guarantee is valid and enforceable, BCN Bank has a strong chance of success in recovering the loan amount from Mr. Good's personal assets.
In summary, Miller's Hardware may face difficulties in holding Mr. Good personally liable, while BCN Bank is likely to succeed based on the personal guarantee provided by Mr. Good.
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The entry that includes a debit to Cash and credit to Accounts Receivable at a discounted price is recording the ______. Multiple choice question.
Answers
We are recording a sales credit when the entry a debit to Cash and credit to Accounts Receivable at a discounted price.
What does sales discounts entails?Normally, the debit of sales discounts account by the amount of the discount are recorded.
For instance, when we debit cash by $99 and debit sales discounts by $1, we will credit the accounts receivable account in the same journal entry.
In conclusion, we are recording a sales credit when the entry a debit to Cash and credit to Accounts Receivable at a discounted price.
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Bill's Auto Repair received a customer payment of $1,000. Which entry is appropriate with a compound journal entry
Answers
The appropriate entry with a compound journal entry is a debit to Cash Discounts arising from the customer paying within the discount window.
For instance, the receipt may be recorded by Bill's Auto Repair as follows:
Debit Cash $1,000Debit Cash Discounts $50Credit Accounts Receivable $1,050What is a compound journal entry?A compound journal entry involves more than one debit and more than one credit. it combines several journal entries. In this case, the customer could have paid $1,050 including Cash Discounts (of $50) allowed to the customer.
Thus, the appropriate entry for a compound journal entry may involve an entry for cash discounts.
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trong hoạt động chính trị, việc không tôn trọng quá trình tích lũy về lượng mà chỉ chú trọng thực hiện bước nhảy biểu hiện khuynh hướng nào?
Answers
Answer:
ewan
Explanation:
finance and financial planning professionals have to work with clients on a (what) basis?
monthly
daily
weekly or
rare
Answers
Monthly customer interaction is necessary for those in finance and financial planning. As a result, choice (A) is right.
According to common use, a financial planning is a thorough assessment of a person's present financial situation and anticipated future financial status that uses current known variables to forecast future earnings, asset values, and withdrawal schedules.
A budget that organizes a person's finances is frequently included in this, as well as perhaps a list of actions or precise objectives for interaction future spending and saving.
This plan divides up future income into several categories of costs, such rent or utilities, while also setting aside a portion for both short- and long-term savings.
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What elements should an ideal CRR plan include?
Answers
The following components belong in a perfect CRR plan. communication lines that are clear, empathy and understanding, activity that is swift and efficient, Feedback and follow-up Continual development
A CRR report: what is it?The Cyber Resilience Assessment (CRR) is an evaluation of an organisation s resilience or cybersecurity measures based on interviews. Your organization will get knowledge of how to handle cyber risk during both regular operations and during periods of stress levels and catastrophe through the CRR.
What is CRR's emergency response?Your department can use what you already know to reduce hazards in your operational area with the aid of a community reducing risk (CRR) program. CRR employs a wide range of instruments to create a strategy and integrated program aimed at minimizing the occurrence and effects of local risks.
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Write 5 2 3 as an improper fraction.
Answers
EXPLANATION: The mixed number 5 2/3 is the same as the improper fraction 17/3.
Swifty Corporation’s April 30 inventory was destroyed by fire. January 1 inventory was $159,400, and purchases for January through April totaled $504,000. Sales revenue for the same period was $671,100. Swifty’s normal gross profit percentage is 35% on sales.
Using the gross profit method, estimate Swifty’s April 30 inventory that was destroyed by fire.
Answers
Answer:
$226,000
Explanation:
Ending Inventory As of April 30, is the ending inventory from January to April.
Opening inventory = $159,409
Purchases = $504,000
gross profit =35% of $671,100
=0.35 x 671,000
=234,000
cost of goods sold = revenue - gross profit
=$671,100 - $234,000
=$437, 000
cost of goods sold = opening inventory + purchases- ending inventory
=$437, 000= $159,409 + $504,000- ending inventory
=$437,000= $663,409- ending inventory.
Ending inventory = $663,409 - $437,000
=$226,000
Which of the following is an example of Brazil undertaking importing?
a.Brazil buys made-in-China products to sell in its domestic market.
b.China buys raw materials such as iron ore from Brazil.
c.Brazilian companies invest heavily in the housing industry in the country.
d.Chinese companies invest in Brazilian industry.
Answers
Wrong
A good example of Brazil undertaking importation is A. Brazil buys made-in-China products.
The products are made in China and imported into Brazil by businesses, institutions, and individuals resident in Brazil.
Importation does not involve the following options:
Option b, whereby "China buys raw materials such as iron ore from Brazil." For Brazil, this is an export. Option c, whereby "Brazilian companies invest heavily in the housing industry in the country." This is domestic investment for Brazil. Option d, whereby "Chinese companies invest in Brazilian industry." This is known Foreign Direct Investment (FDI).Thus, when Brazilian persons import products and services from another country, they are classified as imports and not exports or domestic investments.
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Question 7 of 10
Yuki is setting up a display in the hardware store where he works. What does
this activity most likely involve?
A. Stacking cartons of merchandise in a safe location
B. Arranging items on shelves at eye level
C. Sorting nuts and bolts from smallest to largest
D. Creating a special exhibit of featured products
Answers
Answer:
D. Creating a special exhibit of featured products
Explanation:
Just did a quiz. a pex
Yuki is setting up a display in the hardware store where he works. Creating a special exhibit of featured products this activity most likely involves. The correct option is D.
What is the importance of an exhibition?Exhibitions and events are effective marketing strategies. They provide you a chance to advertise your goods or services to an audience that may be unfamiliar with you or your business. Additionally, they provide a chance to network with both current and new clients. Continue reading to learn about more advantages of exhibitions.
Your product displays play a crucial role in attracting customers. You can easily draw customers in and emphasize your product's standout characteristics with a well-designed POP display. One risk of shopping is being lost in the sea of merchandise.
Thus, the ideal selection is option D.
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The Omega Corporation has some excess cash it would like to invest in marketable securities for a long-term hold. Its Vice-President of Finance is considering three investments: (a) Treasury bonds at a 11 percent yield; (b) corporate bonds at a 14 percent yield; or (c) preferred stock at an 12 percent yield. Omega Corporation is in a 40 percent tax bracket and the tax rate on dividends is 10 percent.
Required:
a. Compute the after-tax yields for the three investment options. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)
b. Which one of the three investments should she select based on the after-tax yields?
Answers
Answer:1
Explanation:
By comparing prices at different stores, consumers will:
Answers
By comparing prices at different stores, consumers will save money and make informed purchasing decisions.
How can comparing prices at different stores benefit consumers?Comparing prices at different stores allows consumers to make informed purchasing decisions and save money. By taking the time to research and compare prices, consumers can identify the best deals and discounts available for the products they intend to buy.
This practice helps them ensure that they are getting the most value for their money. It can also help consumers uncover any price discrepancies or inflated prices allowing them to avoid overpaying for goods and services.
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How does a business survive and maintain a profit?
Answers
Answer:
Make sure you don't copy and paste. Have a good day!!!
Explanation:
1. Customers
Find and keep your own customers – you have to be able to solve their real problems & sell yourself effectively.
Too many businesses rely on ‘being in the supply chain’, have too few major customers and do not invest personal time and effort in developing and maintaining customer relations – remember, ‘people buy people’.
Check their credit rating and monitor their speed of payment.
You have not made a sale until they’ve paid the bill. Some customers have bad habits over slow payment; some are big enough to know better. Some will go under before they pay – avoid them.
2. Risks
Assess risks & their potential impact – e.g. customer or supplier closure
Develop contingency plans to mitigate risks
We live in a risky business environment. Don’t assume everything will be OK – look at the potential risks, pitfalls and liabilities for your business and at how you can reduce the biggest risks or anticipate how you will respond if the worst happens.
3. Opportunities
Look for ways to create new value – e.g. new pricing, products & offers to stimulate demand
It often takes longer and costs more than you think to innovate or do anything new.
Use the technology – social media, tablet computing and smartphones are constantly changing the ways we can do business
There are always new opportunities and growing confidence in the economy accelerates these. Many of the most attractive are not in the UK but are international.
Innovation and new approaches can open up promising opportunities but experience tells us that when doing anything new often costs more and takes longer to implement than you first expect, so be prepared to increase your investment of time and money for those new ideas. That means doing your research to find out just how attractive an opportunity it is in the first place.
4. Money in – manage cash and break even
Forecast and monitor your cash flow very closely
Aim to maintain/increase profit margins rather than just increasing sales turnover (bottom line not top line)
Monitor breakeven on the business, customers, products, staff.
Beware of ‘buying’ work at cut-throat margins. Profitable businesses can fail because they run out of money, often suffering from slow payment and lack of credit. Aim to be cash-positive and you will sleep better at night. Break-even is the point at which the business, a person or a contract starts making a profit and is always an important measure.
5. Money out – manage costs and debt
Keep your fixed costs down: avoid costs which are not essential.
Aim to grow sales on a variable cost basis – borrow, rent or lease assets but don’t buy things or hire people you don’t need.
Keep in contact with creditors & lenders to avoid nasty surprises.
Businesses can be wasteful; you don’t need to be. Invest your money only in assets and projects which will provide a strong return. The worst time to ask a lender for more money is when you really need it. Up to date management accounts are essential and you must read them to monitor the health of the business.
6. People
Optimism – positive, realistic leadership with open communications
Set & monitor clear & realistic targets – sales, costs, project completion, debt etc.
Move unproductive people & customers out of the business.
At the end of the day it’s all about how you manage relationships with people. You can tell a lot about a business from the quality of interactions between its managers, employees, customers and suppliers.
Answer:
Explanation:
No business can survive for a significant amount of time without making a profit, though measuring a company's profitability, both current and future. Without sufficient capital or the financial resources used to sustain and run a company, business failure is imminent.
During the fourth quarter of 20--, there were seven biweekly paydays on Friday (October 4, 18; November 1, 15, 29; December 13, 27) for Quality Repairs. Using the forms supplied below, complete the following forms for the fourth quarter.If an amount or input box does not require an entry, leave it blank or enter "o". Quarterly Payroll Data Total Earnings 5 Employees OASDI HI FIT SIT$18,750.00 $1.162.50 $271.88 $1,875.00 $1,312.50Employer's OASDI $1.162.50Employer's HI 271.88Federal deposit liability each pay 677.68a. Complete the Federal Deposit Information Worksheets reflecting electronic deposits (monthly depositor). Federal deposit liability each pav, $677.68. FEDERAL DEPOSIT INFORMATION WORKSHEET Employer Identification Number 00-0004701 Name QUALITY REPAIRSMonth Tax Year Ends 12 Amount of Deposit 2,710.72 941Type of Tax (Form) 941 Tax Period 4th quarterAddress 10 SUMMIT SQUARE Phone Number (501) 555-7331 City, State, ZIP CITY STATE 00000-0000 To be deposited on or before November 15, 2019
Answers
Answer:
The missing figures for Worksheets are;
Type of Tax (Form) - 941
This is used by Employers to report the taxes they withheld from Employee .
Amount of Deposit - $1,355.36
The Federal Deposit Liability per pay was $677,68. There was biweekly payments meaning 2 payments were made in the month so this figure must be multiplied by 2.
= 677.78 * 2
= $1,355.36
Tax Period - 4th Quarter (stated in question)
To be deposited on or before - November 15, 2019
This is because when paying monthly, the due date is always on the 15th of the following month.
What is the difference between gross and net pay?
A. There is no difference between gross pay and net pay.
B. Gross pay is the amount you earn; net pay is the amount you
receive after deductions.
C. Net pay is always more than gross pay.
D. Net pay is the amount you earn; gross pay is the amount you
receive after deductions.
Answers
the distinction between gross and net wages Your gross pay is how much you are paid; your net pay is how much you are paid after deductions. As a result, choice (B) is accurate.
Generally speaking, net wages" refers to the sum of money an employee receives after all withholdings and taxes have been deducted from their gross pay. It serves as a representation of the real pay that an employee receives.
To be clear, the appropriate sentence describing the distinction between gross compensation and net paid is Net pay is the amount you receive after deductions; gross pay is the amount you earn.
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WHOEVER CAN GUESS MY PATRONUS IN HARRY POTTER AND WHAT HOUSE I AM IN FIRST WILL GET BRAINLIEST AND 30 POINTS
Answers
A project has four activities: A, B, C, and D. The budgeted (planned) cost of each activity is $22K, $14K, $12K, and $28K, respectively. The planned percentages complete for the current date are 90%, 80%, 70%, and 20% respectively. The actual percentages complete for the current date are 100%, 90%, 75%, and 10% respectively. The actual cost of the work performed to date is $40K. What is the schedule performance index for the project
Answers
Answer:
1.03
Explanation:
Activity Amount spent Planned % Planned value
A 22,000 90% $19,800
B 14,000 80% $11,200
C 12,000 70% $8400
D 28,000 20% $5600
Total planned value $45,000
Activity Amount spent Actual percentage Earned value
A 22,000 100% $22,000
B 14,000 90% $12,600
C 12,000 75% $9000
D 28,000 10% $2,800
Total Earned value $46,400
Schedule performance Index = Total Earned value/Total planned Value
Schedule performance Index = 46,400/45,000
Schedule performance Index = 1.03
Suppose you own a bicycle but haven't found the time to ride it much lately. These days, it is only worth $25 to you. One of your close friends, who recently got a job at the college bookstore two miles down the road, wants to take it off your hands. He offers you $70 for the bicycle, and you gladly accept. Your friend is also happy because he thinks the bicycle is worth $94 . How much total value was created from this trade? $
Answers
The total value created from this trade can be calculated by subtracting the value of the bicycle to you from the value of the bicycle to your friend and adding it to the value of the bicycle to you.
The value of the bicycle to you is $25 and the value of the bicycle to your friend is $94.
Therefore, the total value created from this trade is: $94 - $25 + $70 = $139
So, the total value created from this trade is $139.
which of these is representative of quantitative data
Answers
Joni buys coffee three times a week at the local donut shop is representative of quantitative data. The correct option is A.
Quantitative data consists of numerical quantities that can be quantified and statistically analyzed. In this scenario, the statement specifically mentions Joni's coffee consumption, revealing that she buys it three times a week. The number "three" signifies a quantity that may be calculated and compared. Quantitative analysis of this data can be used to determine average weekly coffee purchases or assess Joni's coffee intake in comparison to others.
Thus, the ideal selection is option A.
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Your Question seems incomplete most probably your complete Question was:
Which of these is representative of quantitative data?
A.Joni buys coffee three times a week at the local donut shop.
B. Andre prefers chocolate cake over vanilla.
C. Georgia prefers floral-scented soaps to sweet-scented soaps.
D. Sammy likes to watch horror movies more than comedy.
Which answer best illustrates what trade-offs are?
Answers
if you have identified a risk, you have?
(a) figured it out how to eliminate it.
(b) recognized that it exists.
(c) publically announced it is a problem.
(d) decided not to reveal it
Answers
Answer:
B
Explanation:
you have recognized that it exists, you have not yet eliminated it or made any other decisions.
Step 2. Search to find any summary about the company that mentions funds for starting the business. Try to find any information containing employee data in this section.
Step 3. Find the section where the product or service is detailed. Look to see what kinds of products or services will be involved with the business. Compare this with what other similar business plans are offering.
Record the information you found for steps 2 and 3. Make sure you discuss how the company got money to start the business, employee data, and what products or services the company provides in comparison with what other similar business plans are offering.
Answers
We can see here that such company gotten after searching for company that mentions funds for starting the business is Go-o-gle.
Funds for starting the business: $1 million in funding from Andy Bechtolsheim.
Employee data: over 160,000 employees worldwide.
What is a company?A company is a legal and organizational entity formed by individuals or a group of individuals with the purpose of conducting business activities. It is an association of individuals who come together to engage in commercial, industrial, or professional activities in order to generate revenue and make a profit.
Their products are digital and online services.
Comparing this company, we see Microsoft.
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MAKARO SUPERSTORE TRIAL BALANCE 31 December, 2022 Capital 30000$ Plant and Machinery 50,000$ Debtors 200,000$ Creditors 100,000$ Loan 95,000$ Interest on Loan 3,000$ Cash 20,000$ Provision for Doubtful Debts 7,000$ Stock on 1st April, 2017 68,000$ Motor Vehicles 100,000$ Bank 35,000$ Land and Building 120,000$ Bad Debts 5,000$ Purchases 660,000$ Sales 1,100,000$ Purchases Return 15,000$ Sales Return 80,000$ Transportation Out Carriage Outwards 25,000$ Transportation In Carriage Inwards 30,000$ Salaries 90,000$ Rent and Insurance 30,000$ Advertising 35,000$ Discount Received 5,000$ General Expenses 34,000$ Bills Receivable 60,000$ Bills Payable 20,000$ Rent Received 3,000$
Answers
To prepare the Makara store balance sheet, we will categorize the items into their respective asset, liability, and equity categories.
MAKARO SUPERSTORE Balance Sheet As of 31 December, 2022Assets:
Plant and Machinery: $50,000
Debtors: $200,000
Cash: $20,000
Stock: $68,000
Motor Vehicles: $100,000
Bank: $35,000
Land and Building: $120,000
Bills Receivable: $60,000
Total Assets: $653,000
Liabilities:
Creditors: $100,000
Loan: $95,000
Interest on Loan: $3,000
Provision for Doubtful Debts: $7,000
Bills Payable: $20,000
Total Liabilities: $225,000
Equity:
Capital: $30,000
Total Equity: $30,000
Total Liabilities and Equity: $653,000
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Explain the concept of Opportunity Costs as they relate to tradeoffs
Answers
While opportunity cost is the cost of opting one course of action and doing another opportunity, a trade-off is an action given up to perform the preferred course of action.
what are some sales channels for detailing cars (service)?
Answers
Answer:
make me Brainlist
There are basically four types of marketing channels:
Direct selling;
Selling through intermediaries;
Dual distribution; and.
Reverse channels.
si el dia 17 de junio me comprometo a pagar una suma de dinero en un plazo de 3 meses: ¿hasta que dia tengo tiempo para hacer efectivo el dinero?
Answers
The date that you would have to pay back the money borrowed would be September 16.
How to find the date ?A financial agreement or contract is established when an individual commits to paying a specific sum of money within an agreed-upon timeframe. In this particular instance, the obligation entails remitting payment within three months from June 17.
Should one vow to pay said amount before 3 whole months after June 17, then they would have until September 16th to follow through on their promise. This is because September 17th marks the end of the third month and thus its conclusion. Nevertheless, given that full payment is mandated within the span of those 90 days, the last day to submit the sum turns out to be September 16th - marking the final date of the time period at hand.
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26 of 100
Which of these statements about the listing presentation manual is not true?
It should be self-explanatory so that a prospective client can just read it.
It should be organized to follow your talk.
It should help you sell the benefits of listing in general and listing with you in particular.
It's support for the verbal presentation.
Answers
The statements about the listing presentation manual that is not true is: A. It should be self-explanatory so that a prospective client can just read it"
Which of these statements about the listing presentation manual is not true?The purpose of a listing presentation manual is to support the verbal presentation and help the agent effectively communicate the benefits of listing a property, as well as why the seller should choose them as the listing agent.
While the manual should be organized to follow the talk, it is not designed to be self-explanatory on its own. Rather, it should be used as a visual aid to reinforce key points made during the presentation and to provide additional information to the seller.
Therefore the correct option is A.
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. What do you think the purpose of standardized testing is?
Answers
Answer:
Explanation:
The purpose of standerdized testing is to allow teachers and administrators to ajust teaching procedures to better educate the students in that School/Area/State.
Answer:
Its for teachers and the school know how you are doing in school. Don't stress about tests. :D
Explanation:
whats the difference between elastic and inelastic in business
Answers
Answer:
Elastic demand means there is a substantial change in quantity demanded when another economic factor changes typically the price of the good or service, whereas inelastic demand means that there is only a slight or no change in quantity demanded of the good or service when another economic factor is changed.
Explanation:
Hope this helps
From,
1kvibing
Suppose a person who is developing a card game crowdfunds $40,000 and holds this as cash for future expenses. If this $40,000 comes from donors' checking accounts, by how much will the money supply fall if the reserve ratio is 10 percent?
A. The Money Supply will decrease by $___.
I've tried 4000, 40000, 36000, 44000, 400000, and everything else you can think of. Someone please help answer this!
Answers
According to the given details, the money supply will decrease by $400,000
Money supply
Money supply refers all the currency and other liquid instruments in a country's economy on the date measured.
Given,
Suppose a person who is developing a card game crowdfunds $40,000 and holds this as cash for future expenses.
Here we need to find the decreasing rate in money supply.
While we looking into the given question, we have identified the following values,
Account balance = $40,000
Reserve ratio = 10%
Now, the decreasing rate is calculated as,
Decrease rate = Account balance[1/reserve ratio]
Now, we have to apply the values on the formula, then we get
Decrease rate = 40000[1/0.10]
When we simplify it, then we get the decrease rate as,
Decrease rate = $400,000
Therefore, the money supply will decease by $400,000.
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