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mezya [45]
3 years ago
8

At December 31, 2017, before any year-end adjustments, Macarty Company's Prepaid Insurance account had a balance of $2,700. It w

as determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be:
A) $1,200.
B) $2,700.
C) $1,900.
D) $1,500.
Business
1 answer:
Reika [66]3 years ago
8 0

Answer:

A) $1,200.

Explanation:

given data

Prepaid Insurance account balance = $2,700

Prepaid Insurance had expired = $1,500

solution

we know here

Insurance Expense (Dr.) = $1,500

Prepaid Insurance (Cr.)  = $1,500

as adjusted balance for Prepaid Insurance =  $1,200

and expired Insurance that is charge to be as Profit or Loss Statement is $1,500

because here

implies the adjust balance for Prepaid Insurance is as

adjust balance for Prepaid Insurance =  2,700 - 1,500

adjust balance for Prepaid Insurance = $1,200

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Answer:

b. False

Explanation:

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A salesperson represent the image of the company he or she is selling for, hence must be professional and well trained because the company gets profit through his interactions with the customers. This means that before the company gets profit, customers must be satisfied because these salespeople act as critical link between the company and its customers.

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3 years ago
Two investment advisers are comparing performance. One averaged a 19% return and the other a 16% return. However, the beta for t
finlep [7]

Answer: Adviser B is the superior stock selector.

Explanation:

For the comparision between the two investment advisers, the Jenson's Alpha will be utilized.

Jenson's Alpha:

= Portfolio Actual Return - CAPM(Benchmark Portfolio Return)

T Bill Rate(Risk free rate) = 6%

Market return(E(Em) = 14%

Beta of Investment Adviser A = 1.5

Beta of Investment Adviser B = 1

For Adviser A:

CAPM = Risk free return + Beta ( E(Rm) - Risk free return)

CAPM(Benchmark Portfolio) = 6 + 1.5 (14-6)

= 6 + 12

= 18%

Actual Return = 19%

Jenson's Alpha = 19% - 18% = 1%

For Adviser B:

CAPM = Risk free return + Beta ( E(Rm) - Risk free return)

CAPM(Benchmark Portfolio) = 6 + 1(14-6) = 6 + 1(8) = 14%

Actual Return = 16%

Jenson's Alpha = 16% - 14% = 2%

Adviser B is a better selector because he has a larger alpha of 2% compared to Adviser A who has 1%.

T Bill Rate(Risk free rate) = 3%

Market return(E(Rm) = 15%

Beta of Investment Adviser A = 1.5

Beta of Investment Adviser B = 1

For Adviser A:

CAPM = Risk free return + Beta ( E(Rm) - Risk free return)

CAPM(Benchmark Portfolio) = 3 + 1.5 (15-3)

= 3 + 18

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Actual Return = 19%

Jenson's Alpha = 19% - 21% = -2%

For Adviser B:

CAPM = Risk free return + Beta ( E(Rm) - Risk free return)

CAPM(Benchmark Portfolio) = 3 + 1(15-3) = 3 + 1(12) = 15%

Actual Return = 16%

Jenson's Alpha = 16% - 15% = 1%

Given the changes, Adviser B is still the better selector because he has a larger alpha of 1% compared to Adviser A who has -2%.

7 0
3 years ago
A bank reconciliation:Group of answer choicesis a formal financial statementboth A and B are correctis part of a sound internal
Anna [14]

The Correct question reads;

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b. Is part of a sound internal control system

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d. Both (a) and (b) are correct

Answer:

<u>a. Should not be prepared by an employee who handles cash transactions</u>

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It is only a bank that prepares a bank reconciliation statement. So, it is correct to say that a bank reconciliation statement should not be prepared by an employee who handles cash transactions.

3 0
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This is an example of outsourcing, which is when domestic jobs are sent to countries overseas to take advantage of the lower costs.

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