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Hello. If grocery stores do not raise the price of pasta even if it merits the raise, it would yield to more people opting to buy that pasta instead. Thus, demand would arise.
Now, if there are more people who want that product, then the grocery stores would have no choice but to make it more expensive to try to lessen the demand. Therefore, the price would increase.
Answer:
Part a
2021 = $7,000
2022 = $6,000
Part b
2021 = $5,250
Explanation:
Sum of the year`s digit method provide for higher depreciation in early life of the asset with lower depreciation in later years.
Step 1
<em>Some of digits calculation :</em>
Year Digits
2021 7
2022 6
2023 5
2024 4
2025 3
2026 2
2027 1
Total 28
Step 2
<em>Determine the depreciable amount</em>
Depreciable amount = Cost - Residual value
= $40,000 - $12,000
= $28,000
Step 3
<em>Depreciation expense calculations</em>
2021 = 7 / 28 x $28,000 = $7,000
2022 = 6/ 28 x $28,000 = $6,000
assuming the equipment was purchased on March 31, 2021
2021 = $7,000 x 9/12 = $5,250