What Is the Net Effect on Net Income as a Result

question 77

Multiple Choice

What is the net effect on net income as a result of consolidating adjustments made in 2017 with respect to the equipment transfer?

• A) Increase net income by $2,000.
• B) Decrease net income by $12,000.
• C) Decrease net income by $10,000.
• D) Decrease net income by $14,000.
• E) Increase net income by $10,000.

---

Definitions:

Supply and Demand

Fundamental economic model describing how prices and quantities of goods and services are determined in a market based on the relationship between the quantity supplied and the quantity demanded.

Price Floor

A government or regulatory minimum price set for a commodity, below which it cannot legally be sold.

Farm Incomes

The earnings from agricultural activities that farmers receive, including profits from selling crops and livestock.

Binding Price Floor

A legally established minimum price that can be charged for a good or service, above the equilibrium price, leading to a surplus.