Answer:
The amount of total assets at the end of the year is $15,600
Explanation:
The computation of the total assets is shown below:
= Borrowed amount + issued stock to owners + purchase of supplies - paid to supplies
= $5,000 + $10,000 + $1,000 - $400
= $15,600
We considered all the items which are given in the question. The payment made to supplies should be deducted as it reduced the balance of cash So, the remaining items would be added
Answer:
b. He will have a capital gain of $6.8 million this year (year of the sale) for tax purposes.
Explanation:
Steve's entire stock position the year of the sale at 100% is $3 million.
On July 1 of same year, he sold 40% of $3 million to an ESOP for $8 million.
40% of $3 million is $1.2 million worth of non-publicly-traded corporate stock that Steve sold. His capital gain is : $8 million - $1.2 million = $6.8 million. Steve will therefore have a capital gain of $6.8 million the year of the sale for tax purposes.
Answer: Repurchasing capital stock from owners.
Explanation: The transactions affecting equity and long term liabilities of a company are specified as financing activities in a cash flow statement.
These transactions are usually made for financing of company projects or for expansion purposes.
Among all other options only repurchasing of capital stock will result in reduction of long term liability of the company.
Hence, option D is correct.
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This can be a deterrent for engaging in practices that are ethically wrong during underwriting process.
Knowing that they could be fined large amount of money if found to be engaging in acts that ethically incorrect will serves to discourage investment banking firms from such acts.<span />
