Question

On december 1, jasmin ernst organized ernst consulting. on december 3, the owner contributed $84,000 in assets to launch the business. on december 31, the company’s records show the following items and amounts.

Answer 1

The question asks for an understanding of accounting profit, which requires deducting explicit costs from total revenue; it also illustrates the concept of implicit costs affecting profit calculations. Additionally, it discusses changes in Singleton Bank's balance sheet showing asset management.

Step-by-step explanation:

The question involves understanding the concept of accounting profit and recognizing the difference between explicit and implicit costs. For example, when Jasmin Ernst started Ernst Consulting, she contributed assets and later calculated an accounting profit. However, she would need to consider her current job's salary as an implicit cost if she were to quit to focus on her new business.

As for the self-check question, to calculate the firm's accounting profit you would subtract the total costs (labor, capital, and materials) from the sales revenue. That is, $1,000,000 (sales revenue) - $600,000 (labor) - $150,000 (capital) - $200,000 (materials) = $50,000 accounting profit.

Changes in Singleton Bank's business plan, as shown in the accompanying figures, depict alterations in the balance sheet which details the bank's reserves, loans, and deposits, highlighting the bank's asset management.