Smith Auto uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. July 3 The company purchased $3,300 of merchandise on credit from Advanced Parts, terms n/60. July 6 The company sold $700 of merchandise for cash (cost is $550) to O’Reily. July 7 The owner, A. Smith, contributed equipment worth $5,400 to the company. July 9 The company sold $850 of used equipment (noninventory) on credit to Junk Yard, terms n/30. July 13 The company sold $3,600 of merchandise (cost is $3,200) on credit to J. Bell, terms n/30. July 15 The company granted J. Bell an allowance (price reduction) of $540 for merchandise purchased on July 13. Smith Auto credited accounts receivable for that amount. July 22 The company purchased a building for $24,000 by issuing a note payable. July 26 The company paid salaries of $4,600 with cash. 1. Journalize its transactions that should be recorded in the general journal. 2. Identify the journal where each of the following transactions should be recorded.

Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity. calculate the cost of new stock using the dividend growth approach. what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics. each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings. equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g

If jobs have been undercosted due to underallocation of manufacturing overhead, then cost of goods sold (cogs) is too low and which of the following corrections must be made? a. decrease cogs for double the amount of the underallocation b. increase cogs for double the amount of the underallocation c. decrease cogs for the amount of the underallocation d. increase cogs for the amount of the underallocation

Which of the following is correct? a. a tax burden falls more heavily on the side of the market that is more elastic. b. a tax burden falls more heavily on the side of the market that is less elastic. c. a tax burden falls more heavily on the side of the market that is closer to unit elastic. d. a tax burden is distributed independently of the relative elasticities of supply and demand.