Atkon Corporation Acquired 90% of the Stock of Beta Corporation

question 96

Multiple Choice

Atkon Corporation acquired 90% of the stock of Beta Corporation three years ago.Both corporations are located in the United States.Beta has been an energy drink producer,but unfortunately has suffered substantial losses due to government fines and lawsuits.All of its revenues had been from the sales of the energy drinks.Beta has now filed for bankruptcy and is closing the business with no assets remaining for shareholders.Atkon Corporation will recognize

• A)a long-term capital loss.
• B)a short-term capital loss.
• C)an ordinary loss.
• D)no gain or loss.

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Definitions:

Opportunity Cost

The cost of the next best alternative foregone when making a decision.

Production Possibilities Frontier

A graph that shows the combinations of two goods that an economy can produce using all available resources and technology efficiently.

Constant

A value or factor that does not change in mathematical expressions or experiments, representing stability within a specified context.