Answer:
Debit Insurance expense $8,000
Credit Prepaid insurance $8,000
Explanation:
The company uses asset method of recording the purchase of insurance. Hence, at end of year end the company must recognize the expire portion of the policy and charge it against insurance expense.
$12,000 / 6 months = $2,000 (monthly insurance expense)
$2,000 x 4 months (September 1 to December 31) = $8,000
Entry:
Debit Insurance expense $8,000
Credit Prepaid insurance $8,000
The balance of the prepaid insurance at the end of first year is $4,000 (12,000 - 8,000).
We are tasked to determine the action of the company when it sold $12,000 worth of their product which is a bicycle including an extended warranty price. It is estimated that extended warranty amount is 2% of the value of the bicycle of these sales will result in warranty work. The company should recognize or acknowledge the warranty expense and liability of expense at every the end of the year.
Answer:
A) Taxing income results in deadweight loss, and purchasing health care on one's own doesn't result in deadweight loss.
Explanation:
When you have a market in equilibrium and a new tax is set, this will always result in a deadweight loss. But individual's are free to spend their money in whatever legal good or service they need or want, so when they purchase health care by themselves there is no deadweight loss.
Answer:
1
Explanation:
Income elasticity is how the quantity demanded of a product changes due to a change in the income of an individual.
The formula for calculating Income elasticity of demand is, percentage change in quantity demanded divided by the percentage change in income.
Here the income of Arista increases but the price of gizmos remains the same, that is why the 10% now will be more than what it used to be before the increase in income.
Hope this helps. Good luck.
Answer:
<em>Increase in quantity demanded</em>
Explanation:
Demand for a product is the different quantities of that product that consumers are willing and ready to pay for at different prices.
There are many factors that affect the demand for a product; these include change in the price of the product, price of related products, change in consumer income, change in fashion, taste and style.
<u><em>Change in quantity demand</em></u>
Specifically, the law of demand states that there is an inverse relationship between quantity demand and its price. Change in quantity demand is a movement along the demand curve.
<em>A change in the price of a product will produce an opposite change in the quantity that consumers are willing to buy assuming all other factors do not change. This is referred as to as change in quantity demand. This can either be an increase or a decrease depending on the direction of the price movement.</em>
<u><em>Change in demand</em></u>
<em>Change in demand is the shift in the demand curve to either right or left. This can be attributed to any of the factors that affect demand other the price e.g change in income.</em>
<em>Therefore a decrease in the price of laptop computers will lead to an increase in the quantity demanded</em> .
