Lorenta Company Has Provided the Following Data (Ignore Income Taxes)

question 59

Multiple Choice

Lorenta Company has provided the following data (ignore income taxes) : 2019 revenues were $117,300.
2019 expenses were $47,800.
Dividends declared and paid during 2019 totaled $9,500.
Total assets at December 31,2019 were $177,000.
Total liabilities at December 31,2019 were $89,000.
Common stock at December 31,2019 was $28,000.
Which of the following is not correct?

• A)2019 net income was $69,500.
• B)Total stockholders' equity at December 31,2019 was $88,000.
• C)Total liabilities and stockholders' equity at December 31,2019 was $177,000.
• D)Retained earnings on December 31,2019 were $41,700.

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Definitions:

Security Selection

The process of choosing individual securities for investment, based on the analysis of their potential for return relative to their risk.

Asset Class

A category of investment with similar characteristics, typically including stocks, bonds, real estate, and commodities.

Market Portfolio

A theoretical bundle of investments that contains all types of assets available in the market, with each asset weighted by its market capitalization.

Passive Portfolio Management

An investment strategy that seeks to replicate and hold a market index or benchmarks, minimizing buying and selling to reduce costs.