The three residents of Smallville are considering a fireworks display. Clark values this public good at $\$ 80$; Lana at $\$ 50$; and Pete (who dislikes fireworks) at $-\$ 30$. Fireworks cost the town $\$ 120$, or $\$ 40$ per person. The efficient outcome is for the town

a. to provide the public good because the median person values it more than its cost per person.

b. to provide the public good because a majority of the residents value it more than its cost per person.

c. to provide the public good because the total value of a majority exceeds the total cost.

d. not to provide the public good because the total value of all residents is less than the total cost.

Which of the following is an example of a public good? a. residential housing b. national defense c. restaurant meals d. fish in the ocean

Which categories of goods are excludable? a. private goods and club goods b. private goods and common resources c. public goods and club goods d. public goods and common resources

Wireless, high-speed Internet is provided for free in the airport of the city of Communityville. a. At first, only a few people use the service. What type of a good is this and why? b. Eventually, as more people find out about the service and start using it, the speed of the connection begins to fall. Now what type of a good is the wireless Internet service? c. What problem might result and why? What is one possible way to correct this problem?

Equipment is purchased on January 1, 2007, for $165,000. The equipment has an estimated life of ten (l0) years or 21,000 operating hours and an estimated residual value of S15,000.

The amount of depreciation to be recorded for the year ended December 31, 2007, using the straight-line method of calculating depreciation, is:

a.$15,000
b. $16,500
c.$33,000
d. $14,400

Mill Creek Golf Club purchased equipment on January 1, 2016, for $31,500. Suppose Mill Creek Golf Club sold the equipment for$22,000 on D ecember 31, 2018. Accumulated D epreciation as of December 31, 2018, was $21,000. Journalize the sale of the equipment, assuming straight-line depreciation was used.

Equipment is purchased on January 1, 2007, for $165,000. The equipment has an estimated life of ten (l0) years or 21,000 operating hours and an estimated residual value of S15,000.

The amount of depreciation to be recorded for the year using the units of production method and assuming that 1,500 hours were used is:

a.$11,786
b. $12,500
c.$10,714
d. $1,500

Orion Flour Mills purchased a new machine and made the following expenditures:

$$\begin{matrix} \text{Purchase price} & \text{$\$ 75,000$}\\ \text{Sales tax} & \text{$6,000$}\\ \text{Shipment of machine} & \text{$1,000$}\\ \text{Insurance on the machine for the first year} & \text{$\quad 700$}\\ \text{Installation of machine} & \text{$2,000$}\\ \end{matrix}$$

The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash. Record the above expenditures for the new machine.

Orion Flour Mills purchased a new machine and made the following expenditures:

Purchase price = $66,000

Sales tax = 5,550

Shipment of machine = 910

Insurance on the machine for the first year = 610

Installation of machine =1,820

The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Record the above expenditures for the new machine. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explain the lower of cost and net realizable value approach to valuing inventory.

Creative Technology reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory. Calculate the amount to be reported for ending inventory.

$$\begin{matrix} \text{Inventory} & \text{Quantity} & \text{Cost} & \text{NRV}\\ \text{Optima cameras} & \text{110} & \text{$\$ 45$} & \text{$\$ 75$}\\ \text{Inspire speakers} & \text{50} & \text{55} & \text{45}\\ \end{matrix}$$

Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory.

$$\begin{matrix} \text{Inventory} & \text{Quantity} & \text{Cost} & \text{NRV}\\ \hline \text{Furniture} & \text{200} & \text{$\$ 85$} & \text{$\$ 100$}\\ \text{Electronics} & \text{50} & \text{400} & \text{300}\\ \end{matrix}$$

1. Calculate ending inventory using the lower of cost and net realizable value. 2. Record any necessary adjustment to inventory. 3. Explain the impact of the adjustment in the financial statements.

Sundance Systems has the following transactions during July.

$$\begin{array}{ll} \text{July 5} & \text{Purchases 40 LCD televisions on account from Red River Supplies for \$2,500 each,}\\ \text{ } & \text{terms 3/10, n/30.}\\ \text{July 8} & \text{Returns to Red River two televisions that had defective sound.}\\ \text{July 13} & \text{Pays the full amount due to Red River.}\\ \text{July 28} & \text{Sells remaining 38 televisions from July 5 for \$3,000 each on account.}\\ \end{array}$$

Record the transactions of Sundance Systems, assuming the company uses a perpetual inventory system.

Wireless, high-speed Internet is provided for free in the airport of the city of Communityville.

What problem might result and why? What is one possible way to correct this problem?