Consider the recorded transactions below. Debit Credit
1. Accounts Receivable 8,700
Service Revenue 8,700
2. Supplies 1,650
Accounts Payable 1,650
3. Cash 8,900
Accounts Receivable 8,900
4. Advertising Expense 1,000
Cash 1,000
5. Accounts Payable 2,400
Cash 2,400
6. Cash 1,100
Deferred Revenue 1,100
Required:
Post each transaction to T-accounts and compute the ending balance of each account. The beginning balance of each account before the transactions is: Cash, $2,100; Accounts Receivable, $2,900; Supplies, $270; Accounts Payable, $2,200; Deferred Revenue, $170. Service Revenue and Advertising Expense each have a beginning balance of zero.

5. profit maximization and shutting down in the short run suppose that the market for polos is a competitive market. the following graph shows the daily cost curves of a firm operating in this market. 0 2 4 6 8 10 12 14 16 18 20 50 45 40 35 30 25 20 15 10 5 0 price (dollars per polo) quantity (thousands of polos) mc atc avc for each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. assume that if the firm is indifferent between producing and shutting down, it will produce. (hint: you can select the purple points [diamond symbols] on the previous graph to see precise information on average variable cost.) price quantity total revenue fixed cost variable cost profit (dollars per polo) (polos) (dollars) (dollars) (dollars) (dollars) 12.50 135,000 27.50 135,000 45.00 135,000 if the firm shuts down, it must incur its fixed costs (fc) in the short run. in this case, the firm's fixed cost is $135,000 per day. in other words, if it shuts down, the firm would suffer losses of $135,000 per day until its fixed costs end (such as the expiration of a building lease). this firm's shutdown price—that is, the price below which it is optimal for the firm to shut down—is per polo.