Mallard Company rents a warehouse on a month-to-month basis for the storage of its excess inventory. The company periodically must rent space whenever its production greatly exceeds actual sales. For several years, the company executives have discussed building their own storage facility, but this enthusiasm wavers when sales increase sufficiently to absorb excess inventory.
What is the nature of this type of lease arrangement, and what accounting treatment should be accorded it, in your view?
impact of Africapitalism on agriculture Agriculture is one of Nigeria’s biggest sectors in the economy as many people living in rural areas rely on rearing animals and growing crops to bring bread to the table. As earlier mentioned the Teragro fruit juice plant was one of the many successful agricultural end products to come from the implementation of Africapitalism. Africapitalism in the agricultural sector has seen immense improvements in rural areas of which the economic philosophy has been applied. In the North Western regions of Sokoto and Kebbi Africapitalism has been widespread and has been highly appreciated by young agricultural innovators who are being supplied with development loans that charge low interest rates by the philanthropic Africapitalist institutions. Many Africapitalist pioneers state that despite the African continent having over 60 percent of the world’s arable land there is still a lot that can be improved in terms of yield output as this land is not being used effectively. By financing and supporting innovative agricultural ideas the African continent has the potential to increase productive and allocative efficiency in the agricultural sector. This strategy has proved successful in the regions of Sokoto and Kebbi with mechanisation on farms increasing efficiency and crop yield as well as ensuring that farmers working on the fields get better pay. The oil and gas sector Gas and oil are the biggest energy contributors in Nigeria. They are one of Nigeria’s biggest exports and therefore play a very pivotal role in Nigeria’s economy. When Nigeria discovered that they have crude oil this shifted the country’s production possibility curve outwards meaning that the economy has grown. From this discovery there have been more benefits than drawbacks. Even though the government has discovered crude oil, there has been a lack of government policies to encourage the local private sector to participate in the economy. Local private sector participation has not been greatly involved in crude oil production, this has hindered the efforts that Africapitalism has made. Figure 3: Shows contribution of each sector to the GDP Source: http://www.afdb.org/en/ Infrastructure Improvement Infrastructure in any country is important for economic development. In Nigeria there is a problem with regards to infrastructure, this pushes the country back in terms of development. Countries such as Nigeria which lack proper infrastructure will heavily depend on other nations for survival. Improved infrastructure is a healthy indicator of economic development in a nation, constructions of firms can help reduce structural unemployment as new firms will have a demand for certain types of employees. In recent times, Nigeria has>GET ANSWER