Fill in the Blanks (A) Through (G) for the Corman

question 46

Essay

Fill in the blanks (a) through (g) for the Corman Company for each of the income statements for years 1 and 2

$\begin{array} { c} { \text { Corman Company } } \\\text { Income Statements } \\\text { For the years ended December } 31 \\\begin{array} { | l | l | l | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline\text { Sales }&\$10,000& \text {(e)}\\\hline \text { Cost of goods sold } & & \\\hline \text { Merchandise inventory (beginning) } & 375 & 750 \\\hline \text { Total cost of merchandise purchases } & 3,625 & 4,875 \\\hline \text { Merchandise inventory (ending) } & 750 & \text { (d) } \\\hline \text { Cost of goods sold } & \text { (a) } & 5,000 \\\hline \text { Gross profit } & 6,750 & 5,200 \\\hline \text { Operating expenses } & 3,750 & \text { (c) } \\\hline \text { Net income } & \text { (b) } & \$ 2,500 \\\hline\end{array}\end{array}$

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Definitions:

Elasticity of Supply

An evaluation of the extent to which the amount of a good provided alters as a result of variations in its price.

Equilibrium Price

The price at which the quantity of goods supplied equals the quantity of goods demanded.

Linear Supply

A supply relationship showing a direct, constant increase in quantity supplied as price increases.

Free Market Equilibrium

A state in an economy where supply meets demand naturally without intervention, and prices are determined by free market forces.