Inventory shrinkage is the shortage of inventory in physical count when compared with the system records.
Explanation:
Write down the values given in the question
St. Book Shop's unadjusted Merchandise Inventory at June 30, 2018 was $ 5 comma 600.
he cost associated with the physical count of inventory on hand on June 30, 2018, was $ 5 comma 500.
Morgan St. Book Shop estimated approximately $ 1 comma 200 of merchandise sold will be returned with a cost of $ 550.
the adjustment for inventory shrinkage is explained in the table attached
The amount that is credited and debited are are found by following the
Note : Inventory shrinkage is the shortage of inventory in physical count when compared with the system records.
Answer:
Cost of capital=11.18%
Explanation:
First We will calculate the Equity of firm:
Equity= Number of share* Book value per share
Equity= 10,000* $25
Equity= $250,000
Long-term debt=$300,000
Expected rate of return=15%=0.15
Current yield to maturity (rdebt)=8%=0.08.
Value of firm=Equity+Long-term debt
Value of firm= $250,000+$300,000
Value of firm= $550,000
Formula:
Cost of capital=11.18%