Obsession Inc. is a publicly traded company with two business lines: perfumes and apparel. The beta of this company is 1.72. Obsession Inc. is contemplating a major restructuring in which it wants to sell off its apparel division, which has an unlevered beta of 0.71, for 20 million. It also wants to borrow an additional 25 million and buy back stock worth 45 million. After the sale of the division and the share repurchase, Obsession Inc. will have 46 million in debt and 143 million in equity outstanding. Assume a tax rate of 40.00% percent. The value of debt and equity prior to these changes are:

For each separate case below, follow the 3-step process for adjusting the prepaid asset account at december 31. step 1: determine what the current account balance equals. step 2: determine what the current account balance should equal. step 3: record the december 31 adjusting entry to get from step 1 to step 2. assume no other adjusting entries are made during the year. a. prepaid insurance. the prepaid insurance account has a $4,700 debit balance to start the year. a re- view of insurance policies and payments shows that $900 of unexpired insurance remains at year-end. b. prepaid insurance. the prepaid insurance account has a $5,890 debit balance at the start of the year. a review of insurance policies and payments shows $1,040 of insurance has expired by year-end. c.prepaidrent.onseptember1ofthecurrentyear,thecompanyprepaid$24,000 for 2 years of rentfor facilities being occupied that day. the company debited prepaid rent and credited cash for $24,000.

According to herman, one of the differences of managing a nonprofit versus a for-profit corporation is

"in my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said wim niewindt, managing director of antilles refining, n.v., of aruba. "at a price of $21 per drum, we would be paying $4.70 less than it costs us to manufacture the drums in our own plant. since we use 70,000 drums a year, that would be an annual cost savings of $329,000." antilles refining's current cost to manufacture one drum is given below (based on 70,000 drums per year):