14.5 Chapter Figures The above figure shows a nation’s consumption function. 1) Using this consumption function, autonomous consumption is A) $0. B) between $1 and $2 trillion. C) more than $2 trillion and less that $5 trillion. D) more than $5 trillion and less than $8 trillion. E) more than $8 trillion. 2) Using this consumption function, the marginal propensity to […]
69.Which of the following steps is not involved in the ABC approach? A.Identify activities that cause costs to be incurred. B.Allocate costs to products based on activity usage. C.Group costs of activities into cost pools. D.Improve processes based on benchmarking. 70.How many distinct activities are used by most companies that design ABC systems? A.Fewer than 3 B.3 to 10 C.11 to 24 […]
30) All but one of the following statements is used to justify protectionism. Which statement is not used to justify protectionism? A) Free trade leads to higher prices for imported goods. B) Free trade reduces employment by driving domestic firms out of business. C) A country should not rely on other countries for goods that are critical to its national defense. D) Trade […]
71. Grogan Inc. had the following information available from its 2007 and 2008 financial statements: Balance sheet information: 2007 2008 Current assets $ 30,000 $ 80,000 Long-term assets 100,000 200,000 Total assets $130,000 $280,000 Current liabilities $ 15,000 $ 10,000 Long-term liabilities 30,000 40,000 Total liabilities $ 45,000 $ 50,000 Common stock $ 60,000 […]
71) Refer to Table 4-4. The table above lists the highest prices three consumers, Curly, Moe, and Larry, are willing to pay for a bottle of champagne. If the price of one of the bottles is $95 dollars, total consumer surplus will be A) $0 B) $35. C) $80. D) $95. 72) Refer to Table 4-4. The table above lists the highest […]
91) Refer to Figure 14-6. The market begins in equilibrium with the curves labelled Demand and Supply. If a labour union negotiates the wage to W2, the difference between this wage and the competitive equilibrium wage is called A) the industry’s wage premium. B) the union wage premium. C) a temporary wage differential. D) a discrimination differential. E) a legislated wage differential. 92) Refer […]
61) Which one of the following government expenditures is an example of “government purchases”? A) $2000 paid to a retiree B) $1000 paid to a poor person for income support C) $4000 spent for services provided by a private consultant D) $100 000 paid as interest on the national debt E) $600 paid to an unemployed worker for employment insurance 62) When measuring actual […]
31) Refer to Figure 33-1. If Ireland and Japan were each to specialize in the good for which they have a comparative advantage, Ireland would produce ________ and Japan would produce ________. A) 0 units of wool and 6 units of steel; 4 units of wool and 0 units of steel B) 3 units of wool and 6 units of steel; 4 units of […]
11) If Russia has a comparative advantage in the production of wheat and China has a comparative advantage in the production of textiles, then A) neither country has anything to gain from specialization and trade. B) it is reasonable to expect that specialization will benefit both countries, but trade will not. C) it is reasonable to expect that specialization and trade will benefit both […]
61. Grant Manufacturing is considering investing in equipment that costs $70,000. The equipment would be depreciated using the straight-line method with no half-year convention over seven years and have no salvage value. If the company has a 40 percent income tax rate and desires an after-tax rate of return of 14 percent on investments, the total present value of the depreciation tax shield is: A. $42,883.B. $27,972.C. $25,730.D. $17,153. […]
108. Mary Martin, the owner of Martin Consulting, Inc., started the business by investing $40,000 cash. Identify the general journal entry below that Martin Consulting, Inc. will make to record the transaction.
A.
Cash
40,000
Common Stock
40,000
B.
Common Stock
40,000
Cash
40,000
C.
Investments
40,000
Cash
40,000
D.
Investments
40,000
Common Stock
40,000
E.
Cash
40,000
Increased Equity
40,000
109. If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as: A. Adebit to an unearned revenue account.B. A debit to a prepaid expense account.C. Acredit to an unearned revenue account.D. A credit to a prepaid expense account.E. No entry is required at the time of collection.
110. On May 31, the Cash account of Bottle’s R US had a normal balance of $5,000. During May, the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of May? A. A $0 balance.B. A $4,300 debit balance.C. A $4,300 credit balance.D. A $5,700 debit balance.E. A $5,700 credit balance.
111. On April 30, Victor Services had an Accounts Receivable balance of $18,000. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. The May 31 Accounts Receivable balance was $13,000.What was the amount of credit sales during May? A. $ 5,000.B. $47,000.C. $52,000.D. $57,000.E. $32,000.
112. During the month of February, Victor Services had cash receipts of $7,500 and cash disbursements of $8,600. The February 28 cash balance was $1,800. What was the February 1 beginning cash balance? A. $700.B. $1,100.C. $2,900.D. $0.E. $4,300.
113. The following transactions occurred during July:1. Received $900 cash for services provided to a customer during July.2. Received $2,200 cash investment from Bob Johnson, the stockholder of the business. 3. Received $750 from a customer in partial payment of his account receivable which arose from sales in June.4. Provided services to a customer on credit, $375.5. Borrowed $6,000 from the bank by signing a promissory note.6. Received $1,250 cash from a customer for services to be rendered next year. What was the amount of revenue for July? A. $ 900. B. $ 1,275. C. $ 2,525. D. $ 3,275. E. $11,100.
114. If TaylorWillow, the owner of Willow Hardware Inc., uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to: A. Debit Automobiles and credit Cash.B. Debit Cash and credit Salary Expense.C. Debit Cash and credit Dividends.D. Debit Dividends and credit Cash.E. Debit Cash and credit Automobiles.
115. Larry Bar opened an frame shop and completed these transactions:1. Larry started the shop by investing $40,000 cash and equipment valued at $18,000.2. Purchased $70 of office supplies on credit.3. Paid $1,200 cash for the receptionist’s salary.4. Sold a custom frame service and collected a $1,500 cash on the sale.5. Completed framing services and billed the client $200. What was the balance of the cash account after these transactions were posted? A. $300. B. $41,500. C. $40,300. D. $38,500. E. $38,700.
116. At the beginning of January of the current year, Little Mikey’s Catering ledger reflected a normal balance of $52,000 for accounts receivable. During January, the company collected $14,800 from customers on account and provided additional services to customers on account totaling $12,500. Additionally, during January one customer paid Mikey $5,000 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be: A. $54,700.B. $49,700.C. $2,300.D. $54,300.E. $49,300.
117. During the month of March, Harley’s Computer Services made purchases on account totaling $43,500. Also during the month of March, Harley was paid $8,000 by a customer for services to be provided in the future and paid $36,900 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $77,300, what is the balance in accounts payable at the end of March? A. $83,900.B. $91,900.C. $6,600.D. $75,900.E. $4,900.
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