<u>Explanation:</u>
The market price has control over the supply of the coffee shops. There are various factors which control the market prices they can be input prices, cost of production and technology used in production. Coffee is an agricultural commodity and it is one of the largest selling commodity all over the world.
Coffee has become an essential goods over the years so the demand for coffee is always constant and the consumption also increases annually. It takes 4 to 5 years to harvest a coffee bean. With latest technology the storage facility is improved. When the price decreases the demand increases which also increases the supply. So any hitch in these factors might affect the supply of coffee to coffee shops.
Answer:
Sales Revenue $811,419
Interest Revenue $12,690
Cost of Goods Sold $575,593
Administrative Expenses $189,840
Income Tax Expense $31,877
Dividends $18,984.
<u>Year end Closing Entries</u> Dr. Cr.
1.
Sales revenue $811,419
Interest revenue $12,690
Income Summary $824,109
2.
Income Summary $797,310
Cost of Goods Sold $575,593
Administrative Expenses $189,840
Income Tax Expenses $31,877
3.
Income Summary $26,799
Retained Earning $26,799
4.
Retained Earning $12,690
Dividend $824,109
Answer:
It will lose revenue
Explanation:
An elastic demand (which are found in goods or services that have substitutes) moves proportionally to price changes.
It means that, if the price of the good rise, then the demand will diminish. The opposite works the same, if the price reduces, then the demand will grow.
On the other hand, elasticity refers to the impact of the prices on the demand of the goods and there are key factors that influence this relation:
- Necessity of the good (or product)
- The existence of substitutes goods or alternatives to those goods
- Time
Answer:
General Ledger Dr. Cr.
1. Cash $65,940
Sales Tax Payable $3,140
Sales $62,800
2. Cost of Goods Sold $37,500
Merchandise Inventory $37,500
3. Sales Tax Payable $39,650
Cash $39,650
Explanation:
Sales tax is subject to 5% which is
Sales Tax = $62,800 x 5% = $3,140
Total Cash received = $62,800 + $3,140 = $65,940
Cost of the merchandise sold is recorded in the cost of goods sold account.
Tax is paid in cash and Tax payable liability is reduced by a debit entry.
