Answer:
management has not explained its business purpose
Explanation:
Since in the question it is mentioned that the firm is engaged in the new financial transaction that contains the material impact on the earnings so this represents that it could be come under the pre existed accounting standards.
Also everyone should be aware of the business purpose plus it is not established for changing off the financial statements
So it would be suspicious because the purpose of the business could not be explained
Answer:
A price floor of 75 cents per pound
Explanation:
Price floor is the legal minimum price set by the government as a price control mechanism of which can be paid for a good, service or labor. It means, the price of a particular good or service cannot fall below the stipulated price given.
In the case where a floor price is set above the equilibrium price (i.e. the price set is higher than the equilibrium price), the quantity supplied would surpass the quantity demanded, which would result in surplus of the goods. Supply exceeds demand.
- If market equilibrium price is 50 cents per pound of banana, and quantity supplied is 10 pounds, <em>setting a price floor of 75 cents per pound (higher than equilibrium price of 50 cents), would result in excess supply. Meaning, more supply of bananas while quantity demanded falls, causing surplus of banana.
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