A. 1. Return predicted by capital asset pricing model for portfolio of .8
= (Risk free return+(Market return- risk free rate)B
B= Beta.
=(.06+(-12-06),8)
=(.06+,048)
= 10.80%.
A.2. Capital Asset pricing model return for portfolio of Beta of 1.5
=(.06+(-12-.06)1.5)
= 15.00%.
A.3. PORTFOLIO A- Portfolio A will be selected for investment because expected return is higher than required return and the portfolio is currently undervalued.
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Answer:
At the end of period the allowance for uncollectible debts will be: 15000-3000 = $ 12000 because 3000 account receivable is written off.
Explanation:
(Opening) Allowance for uncollectible accounts = 3000 (Dr)
During the year company estimates = $ 15000
Entry : Dr Bad debts expense 15000
Cr Allowance for bad debts 15000
( To record uncollectible accounts)
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Answer:
the adjustment for estimated uncollectible accounts will require
b. Debit to Bad Debt Expense for $10,000.
Explanation:
There are two primary methods for estimating bad-debt expense. The first is an income-statement approach that measures bad debt as a percentage of sales.
Accout receivable at the end_ 80000
Credit sales_______________400000
Estimate________________ 2,50%
Debit bas debt expense______10000