Lane Company is completing the accounting cycle at the end of its annual accounting period, December 31, 2016. Adjusting entries have not been made during the year so three adjusting entries must be made to update the accounts. The following accounts, selected from the company's chart of accounts, are to be used for this purpose. They are coded to the left of each title for convenient reference.
Definitions:
Marginal Cost of Production
The cost of producing an additional unit of a good, taking into account both variable and fixed costs.
Price Elasticity of Demand
A measure of how much the quantity demanded of a good responds to a change in the price of that good, with elasticity greater than 1 indicating a high responsiveness.
Marginal Cost
The increase in cost resulting from the production of one additional unit of output.
Advertising Elasticity of Demand
Advertising elasticity of demand quantifies the change in demand for a product as a result of a change in the amount of advertising for that product.
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