Milo clothing experienced the following events during 2016, its first year of operation: 1. acquired $12,000 cash from the issue of common stock. 2. purchased inventory for $5,600 cash. 3. sold inventory costing $3,360 for $5,712 cash. 4. paid $650 for advertising expense. required a. record the general journal entries for the preceding transactions. (if no entry is required for a transaction/event, select "no journal entry required" in the first account field.)

Explanation:

The four transactions  will be recorded in the general journal as follows:

1)Debit cash                 $12,000

             Credit common stock                       $12,000

(To record the sale of common stock)

2)Debit purchases                 $5,600

            Credit   cash                 $5,600

(To record purchase of inventory in cash)

3)Debit cash                 $5,712

           Credit sales                        $3,360

            Credit gross profit              $2,352

(To record the sale of inventory in cash)

4)Debit advertising expenses                   $650

          Credit cash                    $650

(To record the payment of advertising expenses in cash)

Explanation:

Suppose there is one perfect competitive market for wheat There are 90 firms in that industry.

Consider the Table 1 given below:

Table 1: Industry supply

MC      individual Quantity (9)     Industry quantity (Q)

25                 30                                30*90=2,700

40                 35                                35*90=3,150

55                 40                                40*90=3,600

70                 45                                45*90=4,050

Take possible MC (Marginal cost) with their respective individual. Calculate the industry supply by multiplying 90 with the firm's individual quantities as shown in Table 1 above.

Going by the graphical diagram in the attached image below, we can derive that:

The orange line represents the industry supply. The lower and higher orange represents the lowest and highest quantity respectively.

The intersection industry demand and industry supply gives the short run price and quantity

Therefor, the short run price and quantity are $40 and $3,150 respectively. This and can be shown with dotted black line.

So Therefore

At the current short run market price, the firms will produce in short run because this price is above the average variable cost

In the long, some firms will exit the market, given the current market price.