Answer:
Soundgarden Company
Journal Entries:
July 10, 2020:
Debit Cash Account (or Accounts Receivable) $800,000
Credit Sales Revenue $800,000
To record the sale of 200 copiers at $4,000 apiece.
July 10, 2020:
Debit Warranty Expense $66,000
Credit Warranty Liability $66,000
To record the estimated warranty maintenance on copiers sold.
December 31:
Debit Warranty Liability $17,000
Credit Inventory $17,000
To record actual warranty costs incurred.
Explanation:
Soundgarden should record these transactions according to the matching principle, whereby warranty expense is recognized in the period that matches the sale so that all expenses related to sales are recognized when the sales are recognized. This is achieved by creating a warranty liability account after the sales and recording a warranty expense as the debit entry. When actual warranty costs are incurred, the Soundgarden Company will debit the warranty liability and credit the inventory actual for the actual costs.
Answer: His district manager may be influenced by <u><em>availability bias. </em></u>
Explanation:
Availability bias may influence his manager because the district manager has this information in his recent memory. He may consider this to be an accurate description of Otis's behavior all of the time, and not just in recent times. Since everything has occurred since the last evaluation he may be judged solely on these actions and not of his overall actions and work ethic in the past.
There are several ways to avoid availability bias such as:
- Set high standards
- Build a diverse team
- Utilize your network
- Seek input from your team
When it comes to using gzip, the vital thing that you need to remember is that this tool helps you in making your files smaller by compressing them. File types vary in how well they get compressed.
That's why there are recommendations given as to the best compression option for you to take. Though, it's not a must that that's the one you choose. In fact, you can run a simple gzip command to either get the minimum compression or get the maximum by varying the speed that it's run to compress the file.
d.
Ron will not make his monthly goal of $1,270 and will need $741.68 to supplement his monthly income when he retires.
Answer:
c. 12.56%
Explanation:
Debt-to-value=D/(D+E) =0.4=> D=0.4D + 0.4E => 0.6D = 0.4E => D/E=4/6=2/3
According to M&M proposition II with taxes,
re=r0+(D/E)(r0-rd)(1-Tax rate)
. Where re= levered cost of equity(or cost of equity when the firm is levered)=.1492, r0 = unlevered cost of equity,Tax rate=34%=.34, rd=pretax cost of debt=7.2%=0.072,D/E=2/3
re = r0+(2/3) * (r0 - 0.072)*(1-.34)
=> 0.1492=r0(1+(2/3)*(1-.34)) -(2/3)*(.072)*(1-.34)
=> 0.1492 = r0(1+0.44) -0.03168
=> 0.1492 = 1.44*r0 -0.03168
r0 = (.1492+0.03168)/1.44
r0 =0.1256
r0 =12.56%
Thus, r0=unlevered cost of equity=12.56%
