On the income statement of a merchandising company, interest income and interest expense are reported:

Select one:

A. As part of cost of goods sold

B. As separate items of other income and expense below the net operating income or loss

C. By showing interest income as additional sales revenue and interest expense as an operating expense

D. By offsetting interest income and interest expense and showing the excess as an operating revenue or expense

Deman- Related Pricing Calculation

a. Calculate the price elasticity of demand for a restaurant’s pizza under the

following conditions:

Old price: $8

Old quantity:

1,000/month

Total Revenue: $8,000

New price: $10

New quantity: 900/month

Total revenue: $9,000

b. If the new quantity sold per month were 700 (instead of 900), what would be

the price elasticity of demand?

A semiprofessional baseball team near your town plays two home games each month at the local baseball park. The team splits the concessions 50/50 with the city but keeps all the revenue from ticket sales. The city charges the team $100  each month for the three-month season. The team pays the players and manager a total of $1000 each month. The team charges $10 for each ticket, and the average customer spends $6 at the concession stand. Attendance averages 30 people at each home game.

The team earns an average of (1)$___ in total revenue (tickets plus share of concessions) for each game and (2) $___ of revenue each season.

With total costs of (3)$____ each season, the team finishes the season with (4)$____ of profit.

The ledger of Oriole Company on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared.

An analysis of the accounts shows the following.

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly.

Question 1

The following transactions for Carleton Company occurred during January 2016:

Show the total amount of revenue and expense recognized under both the accrual basis and cash basis of accounting.

Given the following adjusted account balances (all normal), prepare the closing journal entries for Ski Lodge 2 on December 31, 2018.

Cash                       45,000       Prepaid rent          9,000            Jane Goden, Capital                    85,000

Land                        65,000       Service revenue     75,500            Unearned service revenue           24,000

Supplies                  4,000      Interest expense    5,000            Amortization expense - Vehicle    15,000

Rent expense          12,500       Salary expense      46,000            Jane Goden, Withdrawals            20,000

Note payable           70,000       Interest payable     3,000           Acc. amortization, Building           15,000           

Freight Payable        2,200       COGS                   1,000          Building                                      85,000

Rent revenue               500       Supplies expense 8,000           Gross margin                              1,000           

Accounts receivable 32,000       Accounts payable 33,000           Amortization Expense – Building 26,000           

Based upon market research, the Hawthorne Company has determined that consumers are willing to purchase 139 units of their portable media player each week when the price is set at $34.50 per unit. At a unit price of $10.40, consumers are willing to buy 380 units per week.

(a) Determine the weekly demand equation for this product, assuming price, p, and quantity, x, are linearly related.
p =

(b) Determine the weekly revenue function.
R(x) =

(c) Determine the number of units consumers will demand weekly when the price is $30.30 per portable media player.
units

(d) Determine the number of units consumers will demand weekly when the revenue is maximized.
units

(e) Determine the price of each unit when the revenue is maximized.
dollars