Answer:
The stock is undervalued. As the required rate of return (6.5%) on market is less than the actual return (7%), the stock is said to be undervalued as it provides an actual return greater than the required rate of return.
Explanation:
To check if a stock is over valued, undervalued or correctly valued, we simply compare the required rate of return on a stock as measured by CAPM with the actual return on the stock.
We can calculate the required rate of return using CAPM equation. The formula for required rate of return under CAPM is,
r = rRf + Beta * (rM - rRF)
Where,
- rRf is the risk free rate
- rM is the return on market
r = 0.05 + 0.5 * (0.08 - 0.05)
r = 0.065 or 6.5%
As the required rate of return on market is less than the actual return, the stock is said to be undervalued as it provides an actual return greater than the required rate of return.
Answer:
The entry on May 7 to record the purchase
Debit : Raw Materials $80,000
Credit : Accounts Payable $80,000
Explanation:
The entry on May 7 to record the purchase is prepared above.
Answer:
niiggarrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
Explanation:
Explanation:
Under the direct write-off method , the journal entry is
Bad debt expense A/c Dr XXXXX
To Account receivable A/c XXXXX
(Being the bad debt expense is recorded)
For recording this journal entry, we Debited the bad debt expense and credited the account receivable
This is the answer. Hence, all the given options are incorrect
Answer:
a. $265,000
Explanation:
Process costing is one of method to assign cost to manufactured unit. This method is most commonly used for identical units produced.
Terada Corporation also uses process costing system. In April $241,000 units were transferred out of the department. To identify the total cost under weighted average method we can add up beginning work in process and units transferred out. We get $265,000 if we add up beginning work in process inventory and cost of units transferred out from the department.
= $24,000 + $241,000
= $265,000.