Wood Company uses the gross method and a perpetual inventory system. Assuming the following entries, compute the amount that Wood Company received on March 14. March 3 Sold goods costing $3,000 to Brown Company on account, $5,000, terms 1/10, n/30. The goods are shipped FOB Shipping Point, Freight Prepaid by Seller, $280. March 9 Brown Company returned undamaged merchandise previously purchased on account, $300. March 14 Received the amount due from Brown Company.

3. saving two consumers, larry and jeff, have utility functions defined over the two periods of their lives: middle age (period zero) and retirement (period 1). they have the same income in period 0 of m dollars and they will not earn income in period 1. the interest rate they face is r. larry’s and jeff’s utility functions are as follow. = 0.5 + 0.5 and = 0.5 + 0.5 for each person is between zero and one and represents each consumer’s temporal discount econ 340: intermediate microeconomics. ben van kammen: purdue university. rate. a. write the budget constraint that applies to both jeff and larry in terms of consumption in each period and ), interest rate, and m. b. what is larry’s and what is jeff’s marginal rate of intertemporal substitution? c. what is the slope of the budget constraint? d. write each consumer’s condition for lifetime utility maximization. e. re-arrange the conditions from part (d) to solve for the ratio, . f. if > which consumer will save more of his middle age income? g. if > 1 1+ , in which period will larry consume more: = 0 or = 1?