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Organic Health Co. is an HMO for businesses in the Chicago area. The following account balances appear on the balance sheet of Organic Health Co.: Common stock ( shares authorized), par, ; Paid-in capital in excess of parcommon stock, ; and Retained earnings, . The board of directors declared a stock dividend when the market price of the stock was a share. Organic Health Co. reported no income or loss for the current year.
Journalize the entries to record the declaration of the dividend, capitalizing an amount equal to market value, and the issuance of the stock certificates.
A city has built a bridge over a river and it decides to charge a toll to everyone who crosses. For one year, the city charges a variety of different tolls and records information on how many drivers cross the bridge. The city thus gathers information about elasticity of demand. If the city wishes to raise as much revenue as possible from the tolls, where will the city decide to charge a toll: in the inelastic portion of the demand curve, the elastic portion of the demand curve, or the unit elastic portion? Explain.