Zion company has assets of $600,000, liabilities of $250,000, and equity of $350,000. it buys office equipment on credit for $75,000. what would be the effects of this transaction on the accounting equation?
a. assets increase by $75,000 and expenses increase by $75,000.
b. assets increase by $75,000 and expenses decrease by $75,000.
c. liabilities increase by $75,000 and expenses decrease by $75,000.
d. assets decrease by $75,000 and expenses decrease by $75,000.
e. assets increase by $75,000 and liabilities increase by $75,000.

e. Assets increase by $75,000 and liabilities increase by $75,000.

Explanation:

The purchase of the asset (office equipment) on credit would result in the following entries;

Debit Office equipment    $75,000

Credit Creditor                  $75,000

Being entries to recognize the purchase of office equipment on credit.

As such, asset increases by $75,000 while liabilities also increase by the same amount.

Option e.

0.95

Explanation:

Given that,

Market demand for wheat: Q = 100 − 2p + 1pb + 2Y

price of wheat, p = $2

price of barley, pb = $3

Income, Y = $1000

Q = 100 − 2p + 1pb + 2Y

   = 100 - (2 × 2) + (1 × 3) + (2 × 1,000)

   = 100 - 4 + 3 + 2,000

   = 2,099

Differentiating Q with respect to Y,

dQ/dY = 2

Income elasticity of wheat:

= (dQ/dY) × (Y ÷ Q)

= 2 × (1,000 ÷ 2,099)

= 0.95