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Teri's Tanning Salons had a balance of $46,300 in its Supplies account on January 1, 2005. The company made two purchases of supplies during 2005, each in the amount of $57,400. The company recorded the first purchase by debiting Supplies Expense and crediting Accounts Payable for $57,400. The company recorded the second purchase by debiting Supplies and crediting Accounts Payable for $57,400. A count of the supplies at December 31, 2005, revealed that $27,900 of supplies remained on hand. Which of the following statements is true?
a. Supplies Expense for the year was $133,200.
b. The adjusting entry to properly state the accounts credited Supplies for $133,200.
c. Supplies Expense for the year was $75,800.
d. The adjusting entry to properly state the accounts debited Supplies for $75,800.
e. None of the above.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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