Answer:
you're receiving too small of a gain
Explanation:
Based on the information provided within the question it can be said that offering a price so low that buyers immediately accept it might mean you're receiving too small of a gain. That is because if a buyer is immediately accepting it, then it can be because they realize that it is a great deal and that they will most likely not find a better price anywhere else and immediately decide to buy it from you. Therefore you can be selling it for an increased profit margin by increasing the price.
Answer:
Blue Co. Shall report $396,000 as gain before income taxes on disposal of the stock.
Explanation:
Book value per share of Red Inc = $1.20 per share
As the value of share is revised just after the declaration but before distribution there will be gain on sale of investment.
Net gain = Sale price - Book value
= $3.40 - $1.20 per share = $2.2 per share
Total gain for the year end on June 30 will be
= $2.2 per share X 180,000 shares = $396,000 shares
Thus Blue Co. Shall report $396,000 as gain before income taxes on disposal of the stock.
Answer: 2
Explanation: You don't automatically gain foresight when you start a business