A Portion of the Statement of Earnings for Tea Company

question 163

Essay

A portion of the statement of earnings for Tea Company is shown below. Provide the missing account titles and amounts. $$\begin{array} { | l | l | l | r | r | } \hline \text { A. } &\underline{\quad\quad}&&{ \$ 110,000 } & \\\hline \text { B. }& \text { Sales returns and allowances } & &\underline{\quad\quad} & \\\hline \text { C. } & \underline{\quad\quad}& & & \$ 100,000 \\\hline \text { D. } &\underline{\quad\quad}& & &\underline{\quad\quad} \\\hline & \text { Gross Margin } & & & \$25,000\\\hline\end{array}$$

---

Definitions:

Budget Line

A budget line represents all combinations of goods and services that a consumer may purchase given current prices and income levels.

Marginal Rate of Substitution

How quickly a person agrees to trade one product for a different one to preserve their overall happiness.

Satisfaction Maximized

The point at which an individual achieves the highest level of satisfaction or utility from the consumption of goods or services.

Consumption Change

A variation in the total amount of goods and services that households and individuals are willing and able to consume over a certain period.