Delta Corporation has the following capital structure: Cost (aftertax) Weights Weighted Cost
Debt (Kd) 10.5% 15% 1.58%
Preferred stock (Kp) 10 20 2
Common equity (Ke) (retained earnings) 14.2 65 9.23
Weighted average cost of capital (Ka) 12.81%

Required:
a. If the firm has $39 million in retained earnings, at what size capital structure will the firm run out of retained earnings?
b. The 10.5 percent cost of debt referred to earlier applies only to the first $21 million of debt. After that the cost of debt will go up. At what size capital structure will there be a change in the cost of debt?

Mesa company produces wooden rocking chairs. the company has two production departments, cutting and assembly. the wood is cut and sanded in cutting and then transferred to assembly to be assembled and painted. from assembly, the chairs are transferred to finished goods inventory and then are sold.mesa has compiled the following information for the month of february: cutting department assemblydepartmentdirect materials $ 73,000 $ 13,000direct labor 73,000 108,000applied manufacturing overhead 159,000 171,000cost of goods completed and transferred out 233,000 255,000required: 1, 2, 3, & 4. prepare journal entries for the transactions in the cutting and assembly departments of mesa company. (if no entry is required for a transaction/event, select "no journal entry required" in the first account field.)