Betancourt company sells automatic can openers under a 75-day warranty for defective merchandise. based on past experience, betancourt estimates that 4% of the units sold will become defective during the warranty period. management estimates that the average cost of replacing or repairing a defective unit is $20. the units sold and units defective that occurred during the last 2 months of 2017 are as follows.

months units sold units defective prior to december 31
november 37,300 746
december 39,300 491

prepare the journal entries to record the estimated liability for warranties and the costs incurred in honoring 1,237 warranty claims. (assume actual costs of $24,740.)

Ryan terlecki organized a new internet company, capuniverse, inc. the company specializes in baseball-type caps with logos printed on them. ryan, who is never without a cap, believes that his target market is college and high school students. you have been hired to record the transactions occurring in the first two weeks of operations. issued 2,900 shares of $0.01 par value common stock to investors for cash at $29 per share. borrowed $68,000 from the bank to provide additional funding to begin operations; the note is due in two years. paid $1,000 for the current month's rent of a warehouse and another $1,000 for next month's rent. paid $1,440 for a one-year fire insurance policy on the warehouse (recorded as a prepaid expense). purchased furniture and fixtures for the warehouse for $16,000, paying $3,200 cash and the rest on account. the amount is due within 30 days. purchased for $2,800 cash the university of pennsylvania, notre dame, the university of texas at austin, and michigan state university baseball caps as inventory to sell online. placed advertisements on google for a total of $340 cash. sold caps totaling $1,900, half of which was charged on account. the cost of the caps sold was $1,100. (hint: make two entries.) made full payment for the furniture and fixtures purchased on account in (e). received $280 from a customer on account.

How will firms solve the problem of an economic surplus a. decrease prices to the market equilibrium price b. decrease prices so they are below the market equilibrium price c. increase prices

Your uncle is considering investing in a new company that will produce high quality stereo speakers. the sales price would be set at 1.5 times the variable cost per unit; the variable cost per unit is estimated to be $75.00; and fixed costs are estimated at $1,200,000. what sales volume would be required to break even, i. e., to have ebit = zero?