Suppose the production function in medieval Europe is Y = K0.5L0.5,where K is the amount of land and L is the amount of labor. T
he economy begins with 100 units of land and 100 units of labor. Use a calculator and equations in the chapter to find a numerical answer to each of the following questions.
a. How much output does the economy produce?
b. What are the wage and the rental price of land?
c. What share of output does labor receive?
d. If a plague kills half the population, what is the new level of output?
e. What is the new wage and rental price of land?
f. What share of output does labor receive now?
a. How much output does the economy produce?
b. What are the wage and the rental price of land?
c. What share of output does labor receive?
d. If a plague kills half the population, what is the new level of output?
e. What is the new wage and rental price of land?
f. What share of output does labor receive now?
1 answer:
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Complete Question:
PB10-2 Recording and Reporting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5]
Tiger Company completed the following transactions. The annual accounting period ends December 31.
Jan. 3 Purchased merchandise on account at a cost of $24,000. (Assume a perpetual inventory system.) Jan.
27 Paid for the January 3 purchase.
Apr. 1 Received $80,000 from Atlantic Bank after signing a 12-month, 5 percent promissory note.
June 13 Purchased merchandise on account at a cost of $8,000.
July 25 Paid for the June 13 purchase.
July 31 Rented out a small office in a building owned by Tiger Company and collected eight months’ rent in advance amounting to $8,000.
Dec. 31 Determined wages of $12,000 were earned but not yet paid on December 31 (Ignore payroll taxes).
Dec. 31 Adjusted the accounts at year-end, relating to interest.
Dec. 31 Adjusted the accounts at year-end, relating to rent.
Required:
1. & 2. Prepare journal entries for each of the transactions through August 1 and any adjusting entries required on December 31.
3. Show how all of the liabilities arising from these items are reported on the balance sheet at December 31.
Answer:
Prepared journal Entries for Questions 1, 2 and 3 are attached as images in this order
1 Journal Entry Worksheet 1 (image 1)
2 Journal Entry Worksheet 1 (image 2)
3 Journal Entry Balance sheet 1 (image 3)
