Following Is an Extract of Account Balances of Aztec Moving

question 198

Multiple Choice

Following is an extract of account balances of Aztec Moving Services as of December 31, after the first year of operation. $$\begin{array} { | l | r | } \hline \text { Accounts Receivable } & \$ 6,000 \\\hline \text { Accounts Payable } & 4,000 \\\hline \text { Salaries Expense } & 5,000 \\\hline \text { Repairs Expense } & 500 \\\hline \text { Truck } & 11,000 \\\hline \text { Equipment } & 11,000 \\\hline \text { Notes Payable } & 8,500 \\\hline \text { Cash } & 7,300 \\\hline \text { Supplies Expense } & 1,500 \\\hline \text { Service Revenue } & 29,000 \\\hline \text { Gasoline Expense } & 2,900 \\\hline \text { Salaries Payable } & 200 \\\hline\end{array}$$ What is the amount of total assets at the end of the year?

• A) $17,000
• B) $35,300
• C) $22,000
• D) $29,300

Identify factors contributing to industry being oligopolistic.

Understand the use of the Herfindahl-Hirschman Index (HHI) by the government in merger regulation.

Calculate the Herfindahl-Hirschman Index (HHI) and analyze market concentration.

Distinguish between different levels of market concentration as indicated by the HHI.

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Definitions:

Allowance for Doubtful Accounts

An accounting method used to estimate the portion of accounts receivable that is expected not to be collected.

Net Realizable Value

The amount (Accounts Receivable – Allowance for Doubtful Accounts) that is expected to be collected.

Gross Accounts Receivable

The total amount owed to a company by its customers for goods or services delivered on credit before any deductions for returns or bad debts.

Bad Debts Expense

The cost associated with accounts receivable that are not expected to be collected.