Explore BrainMass
Share

# The amount of utility

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

In terms of the consumer theory set forth in this chapter, can you explain the meaning of the following statements? a. "I think you get more for your money from Nike than from Reebok." b. "I wanted to buy a Boxster rather than a Malibu, but it just wasn't worth it." c. "I'd like to go to Mexico over spring break, but I just can't afford it," said Don. Jill asked, "Don't you have enough money in your account?" Don replied, "Yeah, but I can't afford to go." d. "I'll have to flip a coin to decide whether to buy chocolate chip or vanilla fudge ice cream."

https://brainmass.com/economics/utility/the-amount-of-utility-462809

#### Solution Preview

a. The amount of utility you derive from Nike is higher than the amount of utility you derive from Reebok. That utility might be due to a better more lasting shoe, design, or from such a things as the utility attached to wearing a brand that has created value around itself (ie. if it is cool to wear ...

#### Solution Summary

In terms of the consumer theory set forth in this chapter, can you explain the meaning of the following statements? a. "I think you get more for your money from Nike than from Reebok." b. "I wanted to buy a Boxster rather than a Malibu, but it just wasn't worth it." c. "I'd like to go to Mexico over spring break, but I just can't afford it," said Don. Jill asked, "Don't you have enough money in your account?" Don replied, "Yeah, but I can't afford to go." d. "I'll have to flip a coin to decide whether to buy chocolate chip or vanilla fudge ice cream."

\$2.19

Josh Stein started his own consulting firm, Astromech Consulting, on June 1, 2007. The trial balance at June 30 is as follows.

ASTROMECH CONSULTING
Trial Balance
June 30, 2007
Debit Credit
Cash \$6,850
Accounts Receivable 7,000
Prepaid Insurance 2,640
Supplies 2,000
Office Equipment 15,000
Accounts Payable \$4,540
Unearned Service Revenue 5,200
Common Stock 21,750
Service Revenue 8,000
Salaries Expense 4,000
Rent Expense 2,000
\$39,490 \$39,490

In addition to those accounts listed on the trial balance, the chart of accounts for Astromech also contains the following accounts: Accumulated Depreciation—Office Equipment, Utilities Payable, Salaries Payable, Depreciation Expense, Insurance Expense, Utilities Expense, and Supplies Expense.

Other data:
1. Supplies on hand at June 30 total - \$980
2. A utility bill has not been recorded and will not be paid until next month - \$180
3. The insurance policy is for a year.
4 \$2,900 of unearned service revenue has been earned at the end of the month.
5. Salaries of \$1,250 are accrued at June 30.
6. The office equipment has a 5-year life with no salvage value and is being depreciated at \$250 per
month for 60 months.
7. Invoices representing \$3,000 of services performed during the month have not been recorded as of June 30.

Instructions:
(a) Prepare the adjusting entries for the month of June.
06/30/07 Account title Amount
Account title Amount

06/30/07 Account title Amount
Account title Amount

06/30/07 Account title Amount
Account title Amount

06/30/07 Account title Amount
Account title Amount

06/30/07 Account title Amount
Account title Amount

06/30/07 Account title Amount
Account title Amount

06/30/07 Account title Amount
Account title Amount

(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. Use T accounts.

Cash Accounts Receivable

Prepaid Insurance Supplies

Office Equipment Accum Depreciation - Office Equip

Accounts Payable Utilities Payable

Salaries Payable Unearned Service Revenue

Common Stock Service Revenue

Salaries Expense Rent Expense

Depreciation Expense Insurance Expense

Utilities Expense Supplies Expense

(c) Prepare an adjusted trial balance at June 30, 2007.

ASTROMECH CONSULTING
June 30, 2007
Debit Credit
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Formula Formula

View Full Posting Details