Barry and Larry,who Are Brothers,are Equal Owners in Chickadee Corporation

question 58

Multiple Choice

Barry and Larry,who are brothers,are equal owners in Chickadee Corporation.On July 1,2013,each loans the corporation $10,000 at an annual interest rate of 10%.Both shareholders are on the cash method of accounting,while Chickadee Corporation is on the accrual method.All parties use the calendar year for tax purposes.On June 30,2014,Chickadee repays the loans of $20,000 together with the specified interest of $2,000.How much of the interest can Chickadee Corporation deduct in 2013?

• A)$0.
• B)$500.
• C)$1,000.
• D)$2,000.
• E)None of the above.

Identify the characteristics of economic resources and differentiate between them (e.g., land, labor, capital).

Understand the notion of the time-value of money and its implications for financial decisions.

Examine the effects of changes in supply and demand on interests and rents.

Understand the concept of economic profit versus salaries and its significance in business.

---

Definitions:

Chromosomes

In the human cell, threadlike structures that come in 23 pairs, one member of each pair originating from each parent, and that contain DNA.

DNA

Deoxyribonucleic acid, a molecule that carries the genetic instructions used in the growth, development, functioning, and reproduction of all known living organisms and many viruses.

Threadlike Structures

Often refers to the strands of DNA found in the cell nucleus which carry genetic information for the development, functioning, growth, and reproduction of all known organisms.

Neurogenesis

The process of generating new neurons in the brain, which continues throughout life and plays a role in learning, memory, and recovering from brain injury.