E3–14 Prepare an adjusted trial balance for Toronto Mobile Pet Grooming as at June 30, 2020. Assume that all accounts have their normal balances. List expenses in alphabetical order.

Accounts payable.............................................................. $ 4,000

Accumulated amortization—truck................................. 7,000

Amortization expense—truck.......................................... 1,000

Cash..................................................................................... 2,400

Truck................................................................................... 40,000

Insurance expense............................................................. 200

Les Birman, capital............................................................ 17,000

Les Birman, withdrawals................................................. 8,000

Prepaid insurance............................................................. 1,800

Salaries expense................................................................. 16,000

Salaries payable................................................................. 2,000

Service revenue.................................................................. 44,000

Grooming supplies............................................................ 4,000

Supplies expense................................................................ 2,000

Unearned service revenue................................................ 1,400

A gas station sells 1500 gallons of gasoline per hour if it charges $ 2.20 per gallon but only 1300 gallons per hour if it charges $ 2.95 per gallon. Assuming a linear model

(a) How many gallons would be sold per hour of the price is $ 2.25 per gallon?
Answer:

(b) What must the gasoline price be in order to sell 800 gallons per hour?
Answer: $

(c) Compute the revenue taken at the four prices mentioned in this problem -- $ 2.20, $ 2.25, $ 2.95 and your answer to part (b). Which price gives the most revenue?
Answer: $

For your initial post: Assume you are going to a bank to apply for a loan for a new product you would like to manufacture and sell or provide a new service to clients. Use your imagination to think of a product or service? What types of expenses would be involved to make the product or service that would be included in your cash flow model? How would you estimate revenue for your product or service? What other factors should you consider in developing pro forma cash flows? What revenue or expense assumptions might be most affected by a sensitivity analysis?

Suppose the demand and supply for a product are described by the equations

Qd = 1080 -4P and Qs = -120+8P.

a. Find the equilibrium P, Q and elasticities of demand and supply

b. If a $6 per unit tax is levied on the demand for the product, find new P, Q and the percent of the tax incidence that falls on consumers and firms.

c. Find the tax revenue and welfare loss associated with the tax.

d. Now double the tax to $12. Find new P, Q, tax revenue and welfare loss.

e. What happens to the efficiency of taxation as we increase the amount of the tax? What are the implications of this result?

q18. select all that apply

Which of the following are characteristics of resources with inelastic demand?

1. a) A fisheries firm is considering a proposed cooling facility project with an initial cost of $390,000 and projected revenue (in thousands of $) of successively 100, 200, and 150 in the next 3 years. Show whether the firm should go ahead with the project if the discount rate is 5%. Would you recommend a different decision if the discount rate is 10%?

b) A proposed Aquaculture project cost $870,000 and it’s expected to generate revenue (in thousand $) in the next 4 years of 230, 410, 390, 170. At a discount rate of 7%, is the project worthwhile? What is the Internal Rate of Return of the investment project?

Renee operates a proprietorship selling collectibles over the web, and last year she purchased a building for $24 million for her business. This year, Renee’s proprietorship reported revenue of $85 million and incurred total expenses of $78.1 million. Her expenses included cost of goods sold of $48.5 million, sales commissions paid of $16.9 million, $10.5 million of interest paid on the building mortgage, and $12.7 million of depreciation.

c. Suppose that Renee’s revenue includes $5 million of business interest income. What is the maximum amount of business interest expense that Renee can deduct this year?

Suppose a company's revenue function is given by R(q)=−q^3+360q^2 and its cost function is given by C(q)=300+19q where q is hundreds of units sold/produced, while R(q) and C(q) are in total dollars of revenue and cost, respectively.

A) Find a simplified expression for the marginal profit function. (Be sure to use the proper variable in your answer.)

MP(q)=

B) How many items (in hundreds) need to be sold to maximize profits? (Round your answer to two decimal places.)

Answer: hundred units must be sold.

The owner of a luxury motor yacht that sails among the 4000 Greek islands charges $688/person/day if exactly 20 people sign up for the cruise. However, if more than 20 people sign up (up to the maximum capacity of 90) for the cruise, then every fare is reduced by $8 for each additional passenger.

a. Assuming at least 20 people sign up for the cruise, determine how many passengers will result in the maximum revenue for the owner of the yacht.

b. What is the maximum revenue?

c. What would be the fare per passenger in this case? (Round your answer to the nearest dollar.)

Suppose a producer in the (perfectly competitive) market for golf balls has the following total cost
and marginal cost functions, and that market price is $10.
T C = 50 + 0.1q
2
MC = 0.2q

(a) [5 pts] What is the firm’s fixed cost?

(b) [5 pts] Write the equation for the firm’s average total costs.

(c) [5 pts] What is the firm’s marginal revenue?

(d) [15 pts] Graph the market and the firm (making sure to illustrate marginal cost, marginal
revenue, average total cost and average variable cost). Should the firm continue to produce in the short run?