When multiple performance obligations exist in a contract, they should be accounted for as a single performance obligation when a. each service is interdependent and interrelated. b. both performance obligations are distinct but interdependent. c. the product is distinct within the contract. d. determination cannot be made. a. each service is interdependent and interrelated. new age computers manufactures and sells pagers and radio paging systems which include a 180 day warranty on product defects. it also sells an extended warranty which provides an additional two years of protection. on may 10, it sold a paging system for $4,500 and an extended warranty for another $1,400. the journal entry to record this transaction would include a. a credit to warranty revenue of $5,900. b. a credit to warranty revenue of $1,400 c. a credit to sales of $4,500 and a credit to warranty revenue of $1,400 d. a credit to unearned warranty revenue of $1,400.

6. why the aggregate supply curve slopes upward in the short run in the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. several theories explain how this might happen. for example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. consider a soybean farmer who expects a price level of 100 in the coming year. if the actual price level turns out to be 90, soybean prices will , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by the quantity of soybeans supplied. if other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to the natural level of output in the short run.