On May 5, 2007, Flynn Corp

question 28

Multiple Choice

On May 5, 2007, Flynn Corp.exchanged 2,000 shares of its $25 par value treasury common stock for a patent owned by Denson Co.The treasury shares were acquired in 2006 for $45,000.At May 5, 2007, Flynn's common stock was quoted at $32 per share, and the patent had a carrying value of $55,000 on Denson's books.Flynn should record the patent at

• A)$45,000.
• B)$50,000.
• C)$55,000.
• D)$64,000.

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Definitions:

Break-Even Sales Increase

The amount of additional sales needed to cover the costs of a new investment or project, without incurring any loss.

Effective Annual Rate

The interest rate on an investment or loan, which takes compounding into account and is expressed as an annual rate.

Credit Terms

The conditions, including repayment period and interest rates, under which credit is extended by a lender to a borrower.

Credit Extended

Credit extended refers to the amount of credit or loan a lender provides to a borrower, allowing them to purchase goods or services on credit.