Answer:
B) value of the levered company will exceed the value of the unlevered company.
Answer:
y = -0.05x + 200
Explanation:
Two points are available ($200, 0), ($190, 200)
We find the equation from these two points.
Slope = (190-200)/(200 -0) = -10/200 = -0.05
Now, we write the equation of line with scope m=-0.05 and point (0. 200)
y-200 = -0.05(x-0)
y = -0.05x + 200 (Demand equation)
Answer:
b. A debit to Merchandise Inventory of $21,800, a credit to Accounts Payable of $21,800
Explanation:
Parker Company uses the perpetual inventory system. It bought merchandise on account from Beige Inc, invoice no. 342, $20,000; terms 1/15, n/30; dated June 25; FOB San Francisco, freight prepaid and added to the invoice, $1,800 (total $21,800).
The following journal entries records this purchase transaction: A debit to Merchandise Inventory of $21,800, a credit to Accounts Payable of $21,800
<u>The reason is that with a perpetual inventory system, transportation costs are added directly to the inventory balance</u>
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