Answer and Explanation:
The journal entries are shown below;
On March 1
Cash A/c $303,500
To Common Stock $3 Par value (44,500 × $3) $133,500
To Paid in capital in excess of par value $170,000
(Being the common stock issued is recorded)
On April 1
Cash $74,000
To Common Stock, no par value $74,000
(Being the common stock issued is recorded)
On April 6
Inventory $43,000
Machinery $155,000
To Common Stock (2,400 ×$20) $48,000
To Notes payable $93,000
To Paid in capital in excess of par value $57,000
(Being the shares are issued)
The answer to this item is letter <em>C. PRICE ELASTIC. </em>
The price elastic demand as stated in this given corresponds to the increase or rise in the total revenue when the price is brought down or decreased. This is indicated by the PED (price elasticity of demand).
The total revenue is calculated by multiplying the total items, good, or services sold by the unit price. For the demand which is price elastic, the decrease in the price will cause a higher raise in the number of customer vying for the products and services.
