Teal corporation is authorized to issue 54,000 shares of $5 par value common stock. during 2020, teal took part in the following selected transactions. 1. issued 5,100 shares of stock at $49 per share, less costs related to the issuance of the stock totaling $8,200. 2. issued 1,000 shares of stock for land appraised at $54,000. the stock was actively traded on a national stock exchange at approximately $50 per share on the date of issuance. 3. purchased 540 shares of treasury stock at $40 per share. the treasury shares purchased were issued in 2016 at $37 per share. (a) prepare the journal entry to record item 1. (b) prepare the journal entry to record item 2. (c) prepare the journal entry to record item 3 using the cost method.

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?