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ahrayia [7]
3 years ago
8

Jessica lists her faulty treadmill for sale on craigslist but does not disclose the problems with it. If Blake buys the treadmil

l believing that it's problem-free, this is an example of market failure due to:
A. the existence of external costs
B. the existence of public goods
C. the lack of competition
D. asymmetric information
Business
1 answer:
kiruha [24]3 years ago
8 0

Answer:

D. asymmetric information

Explanation:

Asymmetric information is when parties in a transaction do not have equal information.

In this transaction, Jessica has more information than blake. She knows the machine is faulty while Blake doesn't.

I hope my answer helps you

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At the beginning of her current tax year, Angela purchased a zero-coupon corporate bond at original issue for $30,000 with a yie
lisabon 2012 [21]

Answer:

She will report an interest income of $1,827 for this year.

Explanation:

The yield to maturity is 6%. However, the interest on the bond is compounded semi-annually. Therefore, we need to calculate the interest income for either semi-annual period and then sum the two incomes.  

Interest income for first semi-annual period

= $30,000 x 0.06 x 6/12

= $900

Interest income for second semi-annual period

= ($30,000 + $900) x 0.06 x 6/12

= $30,900 x 0.06 x 6/12

= $927

Interest income for the year

= $900 + $927

= $ 1,827

4 0
3 years ago
Read 2 more answers
Antonio and Barbara are partners who share income in the ratio of 1:2 and have capital balances of $40,000 and $70,000 at the ti
NikAS [45]

Answer: c. $20,000

Explanation:

The Loss on Realization is monies accrued after assets have been sold off at less than their original value and in Calculating it, the following formula is used,

Loss on realization = Total Capital Balances after payment of liabilities minus - balance

Slotting in the figures therefore we have,

Loss on realization = $40,000 + $70,000 - $80,000

= $30,000 was the total loss on Realization

Seeing as Antonio and Barbara are partners who share income in the ratio of 1:2 we allocate to Barbara as follows,

Barbara = $30,000 * 2/(1+2)

= $20,000

Therefore option C is correct.

6 0
3 years ago
Orion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at
balandron [24]

Answer:

Transactions Units Unit Cost

a. Inventory, Beginning 300 $ 14

b. Purchase, April 11 950 12

c. Purchase, June 1 850 15

d. Sale, May 1 (sold for $42 per unit) 300

e. Sale, July 3 (sold for $42 per unit) 630

f. Operating expenses (excluding income tax expense), $18,200

1 and 2) When you use a periodic inventory method, cost of goods available for sale and ending inventory are the same. They differ only when you use a perpetual inventory.

ending inventory = 1,170 units

Ending inventory under FIFO:

$28,350 - $11,760 = $16,590

Ending inventory under LIFO:

$28,350 - $13,710 = $14,640

Ending inventory under weighted average:

$28,350 - $12,555 = $15,795

3) total units sold = 930 units

COGS under FIFO:

(300 x $14) + (630 x $12) = $11,760

COGS under LIFO:

(850 x $15) + (80 x $12) = $13,710

COGS under weighted average:

($28,350 / 2,100) x 930 = $12,555

4) Income statement under FIFO

Sales revenue                  $39,060

COGS                                <u>($11,760)</u>

Gross profit                       $27,300

Operating expenses       <u>($18,200)</u>

Operating income              $9,100

Income statement under LIFO

Sales revenue                  $39,060

COGS                                <u>($13,710)</u>

Gross profit                       $25,350

Operating expenses       <u>($18,200)</u>

Operating income               $7,150

Income statement under weighted average

Sales revenue                  $39,060

COGS                               <u>($12,555)</u>

Gross profit                       $26,505

Operating expenses       <u>($18,200)</u>

Operating income              $8,305

6) FIFO minimizes operating income, therefore, minimizes income tax expense.

4 0
3 years ago
On April 1, 2016, the premium on a one-year insurance policy was purchased for $3,000 cash with the insurance coverage beginning
Gekata [30.6K]

Answer:

C. Insurance expense will increase $2,250

Explanation:

On April 1 2016, the following journal entry will be recorded in respect of the premium paid on a one year insurance policy:

                                                         Debit                       Credit

Prepaid Insurance                          $3,000

Cash                                                                                  $3,000                                                                                                      

The year end given in this question is December 31, 2016 and the insurance premium is for one year and since the insurance premium is paid on April 1, 2016, therefore, only expense in respect of 9 months i.e. from April 1, 2016 to the December 31, 2016 will be recognised in this year. Remaining expense of three months will be recognised in the Year ended December 31,2017.

The following Journal entry will be recorded in respect of insurance expense in accounts on December 31, 2016.

                                                                   Debit             Credit

Insurance expense(3,000*9/12)               2,250

Prepaid Insurance                                                            2,250                    

So the answer will be C. Insurance expense will increase $2,250

5 0
3 years ago
On the basis of this information, what were total maintenance costs when the company experienced 23,000 machine hours of activit
spayn [35]

Answer:

Results are below.

Explanation:

<u>First, we need to calculate the total cost for each activity level:</u>

High activity level= 27,000*27.3= $737,100

Low activity level= 23,000*34.3= $788,900

<u>Now, using the high-low method, we can determine the variable and fixed costs:</u>

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (788,900 - 737,100) / (27,000 - 23,000)

Variable cost per unit= $12.95 per machine-hour

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 788,900 - (12.95*27,000)

Fixed costs= $439,250

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 737,100 - (12.95*23,000)

Fixed costs= $439,250

<u>Finally, for 25,000 hours:</u>

Total cost= 439,250 + 12.95*2,5000

Total cost= $763,000

8 0
3 years ago
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