On the First Day of the Fiscal Year, Hawthorne Company

question 53

Multiple Choice

On the first day of the fiscal year, Hawthorne Company obtained a $ 88,000, seven-year, 5% installment note from Sea Side Bank. The note requires annual payments of $15,208, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $4,400 and principal repayment of $10,808. The journal entry Hawthorne would record to make the first annual payment due on the note would include:

• A) a debit to Cash of $15,208
• B) a credit to Notes Payable for $10,808
• C) a debit to Interest Expense for $4,400
• D) a debit to Notes Payable for $15,208

Describe the role of government transfer payments and social insurance programs in addressing poverty and inequality.

Examine the impact of demographic factors and policy decisions on poverty rates and income inequality.

Evaluate the effectiveness of welfare programs and their criteria, including means-tested and in-kind benefits.

Identify the causes and consequences of changes in income inequality over recent decades.

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Definitions:

Excess Profit

Profit earned by a firm that exceeds the normal level of profit in its industry, often due to monopolistic power or a lack of competition.

Economic Profit

The difference between the total revenue earned from production and the total costs (including both explicit and implicit costs) involved in the creation of that production.

Excess Profit

Profit earned by a firm that exceeds the normal profit level, often due to monopolistic power or market inefficiencies.

Marginal Revenue

The additional income generated from selling one more unit of a good or service.