Mary jane is a lawyer who can earn $150 per hour in her law practice. she is also an excellent carpenter who can build cabinets three times as fast as the best carpenter, whose hourly wage is $20 per hour. which of the following is a correct economic statement? a. mary jane has a comparative advantage in law so she should specialize in law and hire a carpenter to make her cabinets. b. mary jane has an absolute and comparative advantage in both law and carpentry, so she should make her own cabinets while continuing to practice law. c. mary jane is three times faster than any carpenter so she should give her law practice to become a carpenter. d. when carpenters work for lawyers, they should charge $150 per hour instead of $20 per hour. e. because mary jane is an excellent carpenter, when the best carpenter works for mary jane, he can only charge one third as much, or $6.67 per hour.

Presented below is a list of possible transactions. analyze the effect of the 18 transactions on the financial statement categories indicated. transactions assets liabilities owners’ equity net income 1. purchased inventory for $80,000 on account (assume perpetual system is used). 2. issued an $80,000 note payable in payment on account (see item 1 above). 3. recorded accrued interest on the note from item 2 above. 4. borrowed $100,000 from the bank by signing a 6-month, $112,000, zero-interest-bearing note. 5. recognized 4 months’ interest expense on the note from item 4 above. 6. recorded cash sales of $75,260, which includes 6% sales tax. 7. recorded wage expense of $35,000. the cash paid was $25,000; the difference was due to various amounts withheld. 8. recorded employer’s payroll taxes. 9. accrued accumulated vacation pay. 10. recorded an asset retirement obligation. 11. recorded bonuses due to employees. 12. recorded a contingent loss on a lawsuit that the company will probably lose. 13. accrued warranty expense (assume expense warranty approach). 14. paid warranty costs that were accrued in item 13 above. 15. recorded sales of product and related service-type warranties. 16. paid warranty costs under contracts from item 15 above. 17. recognized warranty revenue (see item 15 above). 18. recorded estimated liability for premium claims outstanding.