Sharon Samson Owns Reliable Waterworks Which Provides Plumbing Service

question 10

Multiple Choice

Sharon Samson owns Reliable Waterworks which provides plumbing service. Transactions of Reliable Waterworks during the first year of operations are given below:
A. Sharon contributed $14,000 into a new checking account for the business and recorded capital contribution.
B. Paid $2,000 for equipment to be used for plumbing repairs.
C. Borrowed $15,000 from a local bank and deposited the money in the checking account.
D. Paid $600 as rent for the year.
E. Paid $500 for plumbing supplies to be used on various jobs in the future.
F. Completed a plumbing repair project for a local lawyer and received $3,500.
Calculate the amount of total assets balance at the end of the first year.

• A) $2,500
• B) $2,000
• C) $29,000
• D) $31,900

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Definitions:

Perfectly Elastic

A situation where a small change in price leads to an infinite change in quantity demanded or supplied, depicted as a horizontal line on a graph.

Perfectly Inelastic

A situation in which the quantity demanded or supplied does not change regardless of changes in price.

Purely Competitive

A purely competitive market is characterized by many buyers and sellers, homogeneous products, and no single entity having market control, leading to price determination by supply and demand forces.

Elastic

Refers to the degree to which the demand or supply for a product or service changes in response to a change in price.