Answer: Principles-based standards set uniform goals for the application of accounting standards
Explanation:
Rule based standards are quite rigid and as a result, set specific goals when it comes to the application of accounting standards. This is in contrast to Principles based standards that set more uniform or general goals that should be met.
This is why IFRS is preferred by most nations in the world as opposed to U.S. GAAP. IFRS gives principle based standards which allow leeway unlike U.S. GAAP which is rules based and gives little leeway in application.
Charles Company acquired Jackson Company for $2,000,000 cash. At that time, the fair value of recorded assets and liabilities was $1,500,000 and $250,000, respectively. If Jackson meets specified sales targets, Charles is required to pay an additional $200,000 in cash per the acquisition agreement. Charles estimates the probability of this to be 50%. The direct costs related to the acquisition were $50,000. What was the amount of the goodwill related to the acquisition?
Answer:
$950,000
Explanation:
Goodwill is defined as the excess of Purchase Price over the Net Assets taken over.
therefore
Goodwill = Purchase Price - Fair Value of Net Assets taken over
Note : Acquisition cost is an expense and not included in this calculation.
Since the probability is more likely than not (Probability > or = 50 %) , we include the $200,000 in the Purchase Price
thus,
Goodwill = $2,200,000 - ($1,500,000 - $250,000)
= $950,000
Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement
Operating Activity Investing Activity Financing Activity A company records a loss of $70,000 on the sale of its outdated inventory D and W Co. sells its last season's inventory to a discount store. Digiink Printing co. buys new machinery to ramp up its production capacity. Yum Brands distributes dividends to its common stockholders for the first
During the last year, Globo-Chem Co. generated $1,053.00 million in cash flow from operating activities and had negative cash flow generated from investing activities (-576.00 million). At the end of the first year, Globo-Chem Co. had $180 million in cash on its balance sheet, and the firm had $280 million in cash at the end of the second year. What was the firm's cash flow (CF) due to financing activities in the second year?
A. $471.25 million
B. $5.189.50 million
C. $282.75 million
D. $-377.00 million
Answer:
1. a. A company records a loss of $70,000 on the sale of its outdated inventory. OPERATING ACTIVITY.
Operating activities have to do with the day to day operations of the business.
b. D and W Co. sells its last season's inventory to a discount store. OPERATING ACTIVITY.
This is also a day-to-day operation of the business so it falls under operating activities.
c. DigiIink Printing co. buys new machinery to ramp up its production capacity. INVESTING ACTIVITY.
Investing activities have to do with the purchase and sale of capital assets such as financial assets in other companies or fixed assets. The machinery purchased here is a fixed asset so this will count as an investing activity.
d. Yum Brands distributes dividends to its common stockholders for the first. FINANCING ACTIVITY.
Financing activities have to do with the long term debt and equity of a company and this includes dividends so this falls under her.
2. Cashflow due to financing activities:
Cash Balance second year = Cash Balance first year + Cash Flows From Operating Activities + Cash Flows From Investing Activities + Cash Flows From Financing Activities
280 = 180 + 1,053 - 576 + Financing activities
280 = 657 + Financing activities
Financing cashflow = 280 - 657
= -$377 million
If the wage of the fifth worker is $20 and his or her value of the marginal product of labor is $25, the firm a. benefits by stopping at this level of labor. b. is likely to fire the fifth worker. c. asks this fifth worker to work overtime. d. is likely to benefit by hiring more workers. e. is likely to lose profit by hiring more workers.
A. benefits by stopping at this level of labor. Option A is correct.
What are the benefits of division of labor?The specialisation of duties and responsibilities within a production process is known as the division of labour. It has many advantages, including improved productivity and efficiency. Workers can become more skilled and proficient in their particular role by breaking down a complex task into smaller, more focused tasks, which leads to higher-quality output and quicker production times. Because mass production can reduce costs per unit, the division of labour also makes it easier to achieve economies of scale. Additionally, it enables more latitude in task distribution and workload modification. As workers concentrate on gaining expertise in their area of specialisation, it can also result in more innovation and specialisation. In general, the division of labour has led to significant advancements in modern industrial production.
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Waterway Industries reported the following information for 2016: October November December Budgeted sales $490000 $370000 $470000 Budgeted purchases $340000 $186000 $218000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. Cost of goods sold is 35% of sales. Waterway purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. Accounts payable is used only for inventory acquisitions. How much cash will Waterway receive during November?
Answer:
$430,000
Explanation:
Cash Waterway will receive during November = (Budgeted Sales October*50%) + (Budgeted Sales November*50%)
Cash Waterway will receive during November = ($490,000*50%) +($370,000*50%)
Cash Waterway will receive during November = $245,000 + $185,000
Cash Waterway will receive during November = $430,000
After Xavier and Alyssa deposited nearly $55,000 in a savings account at Bigbux Bank, the bank failed and filed for bankruptcy. Because the Bigbux was an FDIC member bank, Xavier and Alyssa:
a. will beible 15 recover 80 percent of the value of their depon, $2,500 deductible.
b. should be protected because their account is fully insured by the FDIC
c. will lose their savings because the FDIC only insures business deposite
d. can recover up to $25,000, but they will probably lose the test since the deposits exceed the maximum coverage offered by the FDIC
Answer:
B
Explanation:
The Federal Deposit Insurance Corporation (FDIC) was established after the great depression. Bank run was attributed to be one of the causes of the great depression. The FDIC increases confidence of depositors in banks because they insure the deposit of bank customers. In the case a bank fails, customers are assured that they would not lose their monies deposited
The FDIC provides protection for up to $250,000 of deposits
$55,000 is less than $250,000, thus the depositors would receive full protection
On April 1, Griffith Publishing Company received $27,180 from Santa Fe, Inc. for 36-month subscriptions to several different magazines. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, what is the adjusting entry that should be recorded by Griffith Publishing Company on December 31 of the first year
Answer:
Debit Unearned Fees, $6,795; credit Fees Earned, $6,795.
Explanation:
Based on the information given the appropriate adjusting entry that should be recorded by Griffith Publishing Company on December 31 of the first year will be :
Debit Unearned Fees $6,795
Credit Fees Earned $6,795
[$27,180/36 months*9 months]
April 1 to December 31=9 months
Interest can be regarded as the Group of answer choices payment to entrepreneurs for incurring risk in the production of new goods. return earned by capital as an input in the production process.
Answer:
return earned by capital as an input in the production process.
Explanation:
The interest means the return that is earned by the capiatl which represent as an input for the process of the production. Also it shows the reward for the capital purpose as the factor of production like land, labor, capital, etc
So, as per the given situation, the last option should be correct and the same is to be considered
Therefore the other options seems incorrect
As of Dec. 31, 2013, a company had current assets of $600,000 and current liabilities of $300,000. Sales of the company are expected to increase by 10 percent for each of the next two years. If all current assets and current liability accounts increase proportionately with sales, what would be the projected current ratio of the company on Dec. 31, 2015
Answer:
2.00
Explanation:
Calculation to determine what would be the projected current ratio of the company on Dec. 31, 2015
Using this formula
Current ratio =Current assets/ Current liabilities
Let plug in the formula
Current ratio =$600,000 /$300,000
Current ratio =2.00
Therefore the projected current ratio of the company on Dec. 31, 2015 is 2.00
CVS pharmacy collects data from bar-coded products. These data can be evaluated and combined to monitor which CVS products are in demand by customers. CVS uses this method to track pricing data to make sure that CVS pricing is competitive. This is an example of _______.
Answer:
InfoScan.
Explanation:
A UPC is an acronym for universal product code. UPC is typically used for the identification of a specific product and its manufacturer (vendor) through a unique code that is printed on the product.
Basically, a universal product code (UPC) comprises of two (2) main parts;
A machine-readable barcode that contains sets of vertical black lines.
A unique twelve (12) digit number placed beneath or adjacent to the machine-readable barcode.
The first six-digits of the UPC represents the manufacturer and is printed on all of its products while the next five-digits is the product's unique reference number (item number) and the last digit is typically known as a check digit, used for the verification of the authenticity of a UPC.
Generally, the universal product code are usually scanned with a barcode scanner and this makes it easier to identify a product, as well as its price.
In this scenario, CVS pharmacy collects data from bar-coded products, which can be evaluated and combined to monitor its products that are in demand by customers. Also, this method is used to track pricing data to make sure that its pricing remains competitive among rivals. Thus, thiis is an example of InfoScan used for systemically scanning price information on products.
g This year, Nilo Inc. granted nonqualified stock options to 230 employees. For financial statement purposes, Nilo recorded a $179,200 expense for the estimated value of the options. As a result of this transaction, Nilo has a:
Answer:
temporary unfavorable book/tax difference
Explanation:
Given that
There is an unqualified stock options for 230 employees
And, the expenses are recorded at $179,200
So based on the above information the nike have temporary also adverse book or tax difference
as this given transaction does not represent the permanent one so it should be considered as temporary
Dakota Company has four customers: A, B, C, and D. The accounts receivable balance in the general ledger is $9,083 and the accounts receivable subsidiary ledger of customers A, C, and D have $1,746, $3,296, and $3,940, respectively. Calculate the amount in the accounts receivable subsidiary ledger account of customer B.
Answer:
$101
Explanation:
Calculation to determine the amount in the accounts receivable subsidiary ledger account of customer B.
Using this formula
Customer B accounts receivable amount=Accounts receivable balance- A,C ,D Accounts receivable subsidiary ledger
Let plug in the formula
Customer B accounts receivable amount=$9,083-$1,746-$3,296- $3,940
Customer B accounts receivable amount=$101
Therefore the amount in the accounts receivable subsidiary ledger account of customer B is $101
1. Hayes Enterprises began 2003 with a retained earnings balance of $820,000. During 2003, the firm earned $470,000 after taxes. From this amount, preferred stockholders were paid $47,000 in dividends. At year-end 2003, the firm's retained earnings totaled $1,040,000. The firm had 120,000 shares of common stock outstanding during 2003.
a. Prepare a statement of retained earnings for the year ended December 31, 2003, for Hayes Enterprises. (Note: Be sure to calculate and include the amount of cash dividends paid in 2003.)
b. Calculate the firm's 2003 earnings per share (EPS).
c. How large a per-share cash dividend did the firm pay on common stock during 2003?
Answer:
Hayes Enterprises
a. A Statement of Retained Earnings for the year ended December 31, 2003
January 2003 Retained Earnings Balance $820,000
After taxes earnings during 2003 470,000
Retained earnings available = $1,290,000
Preferred dividends = (47,000)
Retained earnings available for common $1,243,000
Common stock dividends = (203,000)
Retained Earnings Balance = $1,040,000
b. 2003 Earnings per share (EPS) = $1.69
c. The company paid $1.69 cash dividend to common stock during 2003.
Explanation:
a) Data and Calculations:
January 2003 Retained Earnings Balance $820,000
After taxes earnings during 2003 470,000
Retained earnings available = $1,290,000
Preferred dividends = (47,000)
Retained earnings available for common $1,243,000
Common stock dividends = (203,000) ($1,243,000 -$1,040,000)
Retained Earnings Balance = $1,040,000
Outstanding common stock shares = 120,000
Mildred and Robert are the only buyers in the market for DVDs. Mildred buys 5 DVDs when the price of a DVD is $6.00 , 4 DVDs when the price of a DVD is $8.00 , and 2 DVDs a month when the price of a DVD is $10.00 . Robert buys 18 DVDs a month when the price of a DVD is $6.00 , 9 DVDs when the price of a DVD is $8.00 , and zero DVDs when the price of a DVD is $10.00 . In the market for DVDs, what do we know about the quantity demanded?
Answer:
increases as the price falls
Explanation:
A. increases as the price rises
B .at $8.00 a DVD is 8 DVDs a month
C. at $6 a DVD is less than the quantity demanded at $8.00 a DVD
D. increases as the price falls
E .at $6.00 a DVD is 4 DVDs a month
According to the law of demand, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.
As price decreases, quantity demanded increases
The National Income and Product Accounts simultaneously provide data on: (a) production and efficiency; (b) technological progress and product improvements; (c) total output and the income derived from its production; (d) slugging percentage and on-base percentage.
Listed below are several transactions that typically produce either an increase or a decrease in cash. Indicate by letter whether the cash effect of each transaction is reported on a statement of cash flows as an operating (O), investing (I), or financing (F) activity.
a. Sale of Common Stock.
b. Sale of Land
c. Purchase of Treasury Stock
d. Merchandise Sales
e. Issuance of a long-term note payable
f. Purchase of merchandise
g. Repayment of note payable
h. Employee salaries
i. Sale of equipment at a gain.
j. Issuance of bonds
Answer:
a. Sale of Common Stock.
Classification: Financing activity
b. Sale of Land
Classification: Investing activity
c. Purchase of Treasury Stock
Classification: Financing activity
d. Merchandise Sales
Classification: Operating activity
e. Issuance of a long-term note payable
Classification: Financing activity
f. Purchase of merchandise
Classification: Operating activity
g. Repayment of note payable
Classification:
Financing activity
h. Employee salaries
Classification: Operating activity
i. Sale of equipment at a gain.
Classification: Investing activity
j. Issuance of bonds
Classification: Operating activity
On January 2, 2020, Howdy Doody Corporation purchased 17% of Ranger Corporation's common stock for $53,000. Ranger's net income for the years ended December 31, 2020, and December 31, 2021, were $17,000 and $54,000, respectively. During 2020, Ranger declared and paid a dividend of $63,000. On December 31, 2020, the fair value of the Ranger stock owned by Howdy Doody had increased to $68,000. How much should Howdy Doody show in the 2020 income statement as income from this investment
Answer:
$25,710
Explanation:
Calculation to determine How much should Howdy Doody show in the 2020 income statement as income from this investment
First step is to calculate the Dividend received
Dividend received=($63,000 × 17%)
Dividend received = $10,710
Second step is to calculate the Increase in Fair value of Stock
Increase in Fair value of Stock=($68,000 - $53,000)
Increase in Fair value of Stock=$15,000
Now let calculate the How much should Howdy Doody show in the 2020 income statement as income from this investment
2020 income statement=$10,710+$15,000
2020 income statement=$25,710
Therefore The amount that Howdy Doody should show in the 2020 income statement as income from this investment is $25,710
Rainforests are being destroyed in order to plant trees to make ___________________________, one of the cheapest oils in the world, which makes companies huge profits.
Answer:
Palm oil
Explanation:
Deforestation the process of permanently removing trees from a given environment for other purposes such as farmlands, timber, and so on has been on a rise.
One of the major activity leading to deforestation is palm oil production. It is a $40 billion industry that has displaced indigenous tribes and wiped out habitats of endangered species like the orangutan.
Burning of rain forests to make way for palm oil plantations also increases carbon emmisions that causes respiratory problems.
Under the WTO agreement:_________
a. tariffs are permitted to be levied by developed countries against developing countries but not against each other
b. a dispute resolution mechanism allows countries to bring grievances to the WTO against countries that levy inappropriate trade discrimination measures
c. there is no dispute resolution mechanism except for trade involving environmental products
d. countries are allowed to place trade barriers on member countries with no particular justification, because like GATT the WTO has no enforcement mechanism
Answer:
Under the WTO agreement:_________
b. a dispute resolution mechanism allows countries to bring grievances to the WTO against countries that levy inappropriate trade discrimination measures.
Explanation:
The WTO (World Trade Organization) Agreement is an international legal framework covering about 63 agreements affecting trade in goods, services, intellectual property, standards, investment, and other issues with some impacts on world trade. The legal framework is a system of rules that supports open, fair, and undistorted trade competition, allowing tariffs and some protections.
The reason for failure of quality improvement efforts ismanagers continue to focus on short-term financial results.managers instinctively blame employees when there is a quality failure.managers interfere with teamwork.all of the above.
Answer:
managers instinctively blame employees when there is a quality failure, managers continue to focus on short-term financial results,and managers interfere with teamwork
Explanation:
Quality improvement can be regarded as systematic as well as formal approach used in analysis of practice performance as well as efforts used in improving performance. variety of this approaches such as
QI models enables one in collections and analysis of data and test change.
It should be noted that The reason for failure of quality improvement efforts is
that;
1)managers instinctively blame employees when there is a quality failure,
2) managers continue to focus on short-term financial results,
3)managers interfere with teamwork
The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is
Answer:
The answer is "The corporation".
Explanation:
In terms of dollar sales, profits, or personnel, the main form of the corporate organization throughout the USA was its company. The company's main form of business organization is indeed the company, a legal entity constituted by the selling of share capital to the owners, who have become stakeholders and the shares elect a board member who manages the company.
If you were an investor during the dot revolution, and you invested primarily in technology stocks, what fundamental principle of finance did you ignore and how did it affect the value of your portfolio
Answer:
If an individual has shares in a dot.com or IT firm in his or her portfolio, the essential concept of finance that might be overlooked while owning the commodity is :
1) The corporation's income/EPS has decreased.
2) A slowdown in the corporation 's growth and turnover.
3) The dividend payment ratio will be reduced.
Quarterly effects on the outcomes would rarely make a difference in the year results, given the seasonal or business pattern in IT organisations.
The following is selected financial information for Osmond Dental Laboratories for 2021 and 2022: 2021 2022 Retained earnings, January 1 $ 53,000 ? Net income 40,000 45,000 Dividends 12,000 25,000 Common stock 78,000 ? Osmond issued 3,000 shares of additional common stock in 2022 for $22,000. There were no other stock transactions. Prepare a statement of stockholders' equity for the year ended December 31, 2022. (Amounts to be deducted should be indicated with minus sign.)
Answer:
Osmond Dental Laboratories
Statement of Stockholders' Equity:
2022
Common stock $90,000
Retained earnings, December 31 101,000
Stockholders' equity $191,000
Explanation:
a) Data and Calculations:
Osmond Dental Laboratories for 2021 and 2022:
2021 2022
Retained earnings, January 1 $ 53,000 ?
Net income 40,000 45,000
Dividends 12,000 25,000
Common stock 78,000 ?
Analysis:
Cash $22,000 Common stock $22,000
Retained earnings, January 1 $ 53,000 81,000
Net income 40,000 45,000
Dividends -12,000 -25,000
Retained earnings, December 31 $ 81,000 $101,000
Common stock on December 31 = $90,000 ($78,000 + $22,000)
Statement of Stockholders' Equity:
Osmond Dental Laboratories for 2021 and 2022:
2021 2022
Common stock $78,000 $90,000
Retained earnings, December 31 81,000 101,000
Stockholders' equity $159,000 $191,000
stock a has an expected return of 20 and stock b has an expected return of 5. what is the expected return on a portfolio this comprised of 67^ of stock a and 33% stoc k b
Answer:
15.05%
Explanation:
Calculation to determine the expected return on a portfolio
Using this formula
Expected return = (Return on stock A * Percentage invested in stock A) + ( Return on Stock B * Percentage invested in Stock B)
Let plug in the formula
Expected return= (20% * 67%) + (5% * 33%)
Expected return= 13.4% + 1.65%
Expected return= 15.05%
Therefore the expected return on a portfolio is 15.05%
Bramble Corp. expects to purchase $110000 of materials in July and $130000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be
Answer:
$125,000
Explanation:
August's cash disbursements for materials purchases wiill be:
= July month purchase paid amount + August month purchase paid amount
= ($110,000 * 25%) + ($130,000 * 75%)
= $27,500 + $97,500
= $125,000
Betsy Union is the Pika Division manager and her performance is evaluated by executive management based on Division ROI. The current controllable margin for Pika Division is $46,000. Its current operating assets total $210,000. The division is considering purchasing equipment for $40,000 that will increase sales by an estimated $10,000, with annual depreciation of $10,000. If the equipment is purchased, what will happen to the return on investment for the division
Answer:
Pika Division
Betsy Union
The return on investment will reduce from 21.9% to 18.4%.
Explanation:
a) Data and Calculations:
Current controllable margin = $46,000
Current operating assets = $210,000
Current return on investment = $46,000/$210,000 * 100 = 21.9%
Increase in sales as a result of the new equipment = $10,000
Increase in depreciation = $10,000
Operating assets after the purchase of the new equipment = $250,000 ($210,000 + $40,000)
Future controllable margin = $46,000 ($46,000 + $10,000 - $10,000)
Future return on investment = $46,000/$250,000 * 100
= 18.4%
An important difference between tariffs and quotas is that tariffs raise the price of the good in the country imposing the tariff. always generate tax revenue for the government. reduce imports. help domestic producers. g
Answer:
The correct answer is the second option: Tarrifs always generate tax revenue.
Explanation:
On the one hand, tariffs are taxes imposed by the government exclusively to imports and exports with the primary purpose of increase the revenue of the nation. Although it also looks for the protection of certains goods being a type of regulation regarding the international trade that goes around the world.
On the other hand, a quota is basically a limit imposed by the government with the only purpose of puting a maximum quantity to the number of imports that can entry in the country and therefore to protect the local industries and the domestic producers with it.
On January 1, a company issued and sold a $440,000, 6%, 10-year bond payable, and received proceeds of $434,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The carrying value of the bonds immediately after the first interest payment is:
Answer:
The carrying value of the bonds immediately after the first interest payment is $434,300.
Explanation:
Face value of the bond = $440,000
Proceeds from bond issue = $434,000
Discount on bond payable = Face value of the bond - Proceeds from bond issue = $440,000 - $434,000 = $6,000
Total number of seminual = Number of years of bond maturity * Number of semiannual in a year = 10 * 2 = 20
Discount amortizaton per semiannual = Discount on bond payable / Total number of seminual = $6,000 / 20 = $300
Carrying value after first interest payment = Proceeds from bond issue + Discount amortizaton per semiannual = $434,000 + $300 = $434,300
Therefore, the carrying value of the bonds immediately after the first interest payment is $434,300.
Lafayette, Inc. was incorporated on January 1, 2014. Lafayette issued 15,000 shares of common stock and 800 shares of preferred stock on that date. The preferred stock is cumulative, $100 par, with an 12% dividend rate. Lafayette has not paid any dividends yet. In 2017, Lafayette had its first profitable year, and on November 1, 2017, Lafayette declared a total dividend of $44,000. What is the total amount that will be paid to common stockholders
Answer:
$5,600
Explanation:
Calculation to determine the total amount that will be paid to common stockholders?
Total amount paid to common stockholders=$44,000-[(800 (12%)($100)*4]
Total amount paid to common stockholders=$44,000-($9,600*4 )
Total amount paid to common stockholders=$44,000-$38,400
Total amount paid to common stockholders=$5,600
(2014-2017=4)
Therefore the total amount that will be paid to common stockholders is $5,600
2. State the accounting equation.
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☆☆●◉✿ Answer:✿◉●☆☆
The accounting equation formula is Assets = Liabilities + Equity.
☆☆●◉✿Step-by-step explanation:✿◉●☆☆
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Suppose that Greece and Germany both produce oil and shoes. Greece's opportunity cost of producing a pair of shoes is 5 barrels of oil, while Germany's opportunity cost of producing a pair of shoes is 11 barrels of oil.
1. By comparing the opportunity cost of producing shoes in the two countries, you can tell that _____ has a comparative advantage in the production of shoes and _____ has a comparative advantage in the production of oil.
2. Suppose that Greece and Germany consider trading shoes and oil with each other. Greece can gain from specialization and trade as long as it receives more than _____ of oil for each pair of shoes it exports to Germany. Similarly, Germany can gain from trade as long as it receives more than _____ for each barrel of oil it exports to Greece.
3. Based on your answer to the last question, which of the following prices of trade (that is, price of shoes in terms of oil) would allow both Germany and Greece to gain from trade?
a. 1 barrel of oil per pair of shoes
b. 17 barrels of oil per pair of shoes
c. 9 barrels of oil per pair of shoes
d. 10 barrels of oil per pair of shoes
Answer:
1. Greece, Germany
2. 2.2 barrels of oil, 0.45 pairs of shoes
3. d. 10 barrels of oil per pair of shoes
Explanation:
a) Data and Calculations:
To produce a pair of shoes costs Greece 5 barrels of oil
To produce a pair of shoes costs Germany 11 barrels of oil
b) This means that it costs Germany more than Greece to produce a pair of shoes, and Germany produces a lot of oil to the extent that she is willing to exchange her 11 barrels of oil for a pair of shoes while Greece can only exchange 5 barrels of oil for a pair of shoes.