One reason that underpricing of new issues occurs more frequently than overpricing is that underwriters want to reduce the risk of a firm commitment. Therefore, Option A is correct.
<h3>What is
underwriting?</h3>
Some major financial institutions, including banks, insurance companies, and investment firms, offer underwriting services in which they guarantee payment in the event of damage or financial loss and accept the financial risk for liability resulting from such guarantee.
Therefore, One reason that underpricing of new issues occurs more frequently than overpricing is that underwriters want to reduce the risk of a firm commitment. Option A is correct.
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"Your question is incomplete, probably the complete question/missing part is:"
A. underwriters want to reduce the risk of a firm commitment.
B. the demand for a new issue is typically too high.
C. underwriters earn low rates of return.
D. issuing firms demand that equity be underpriced.
Answer:
b. credit to factory overhead for $432,000.
Explanation:
Before recording the factory overhead costs we need to do the calculations which are shown below:
For computing the ended overhead amount, first, we have to compute the predetermined overhead rate. The formula is shown below:
Predetermined overhead rate = (Total estimated factory overhead) ÷ (estimated direct labor-hours)
= $360,000 ÷ 30,000 hours
= $12
Now we have to find the actual overhead which equal to
= Actual direct labor-hours × predetermined overhead rate
= 36,000 hours × $12
= $432,000
So, the ending overhead equals to
= Actual manufacturing overhead - actual overhead
= $377,200- $432,000
= $54,800 under-applied
Based on the scenario provided above, the banker's action is still considered to be legal despite of the fact that he provides personal details to the banker though it is also considered as highly unethical because using this information is his way of selling insurance policies in which isn't the best thing to do as a banker's job.
Answer:
c. debit to Bad Debts Expense for $6,900.
Explanation:
Allowance for Doubtful Accounts $1,100 credit balance,
Estimated Un collectibles $8000 credit
Required Adjustment $ 6900 credit
The adjustment to record bad debts for the period will require a
c. debit to Bad Debts Expense for $6,900.
Bad Debt Expense $ 6900 Dr
Allowance for Doubtful Accounts $ 6900 Cr
Alternatively if the allowance account had a debit balance the entry would have been posted adding the two amounts.
It would make a revenue of $750
<h3>What is
revenue ?</h3>
The total amount of income earned by the sale of goods and services connected to the principal operations of the firm is referred to as revenue in accounting. Commercial revenue is often known as sales or turnover. Some businesses make money by charging interest, royalties, or other fees.
The overall cost of making and distributing a product or service to consumers is referred to as the cost of revenue. The cost of revenue is disclosed in a company's income statement. It is intended to show the direct costs related with the goods and services offered by the company.
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