McCoy Company Provides Plumbing Services

question 16

Multiple Choice

McCoy Company provides plumbing services.The company is a sole proprietorship.Transactions during the first year of operations are provided below.
a) The owner,Sharon McCoy,contributed $10,000 cash in exchange for capital.
b) Paid $1,100 cash for equipment to be used for plumbing repairs.
c) Borrowed $12,000 from a local bank and deposited the money in the checking account.
d) Paid $300 rent for the year.
e) Purchased $200 of office supplies by cash.
f) Completed a plumbing repair project for a local lawyer and received $3,200 cash.
Calculate the amount of total liabilities at the end of the first year.

• A) $12,000
• B) $10,000
• C) $20,900
• D) $3,200

---

Definitions:

Equilibrium

The state in which market supply and demand balance each other, and as a result, prices become stable.

Maximum Utility

The highest level of satisfaction or benefit that a consumer can obtain from the consumption of goods and services within the constraints of their income and prices.

Consumer Income

The total amount of money earned by individuals or households that can be used for saving, spending, or investing.

MU y/ Pᵧ

MU y/ Pᵧ represents the marginal utility of good "y" divided by its price, a concept in economics used to analyze consumer choice, indicating the additional satisfaction per unit of currency spent on that good.