E Always Had Eyes for a Deal Despite Some Initial Growth Based on the Idea, the Pizza

question 58

Multiple Choice

E always had eyes for a deal.When B approached her about his idea of having his chain of pizza parlors deliver video tapes along with pizzas, E saw dollar signs.B needed financing, and E gave the corporation $10,000 in exchange for stock.A summary of the corporation's balance sheet after the exchange revealed the following: $\begin{array}{lc} \text { Assets} &\$3,000,000\\ \text { Liabilities } &500,000\\ \text {Retained earnings } &1,200,000\\ \text {Capital stock } &800,000\\\end{array}$ Despite some initial growth based on the idea, the pizza business fell on hard times due to heavy competition.This year E sold her stock at a $9,000 loss, her only property transaction (i.e., sales during the year) .This year, E may deduct how much?

• A)$0
• B)$3,000
• C)$9,000
• D)$10,000
• E)None of the above

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Definitions:

Type A Behavior

A personality pattern characterized by high levels of competitiveness, self-imposed stress, impatience, and aggression.

Stress

A condition of mental or emotional strain or tension resulting from adverse or demanding circumstances.

Catastrophes

Severe and unexpected events that cause significant disruption and distress, impacting mental and physical health.

Sept. 11

The date of a series of coordinated terrorist attacks in the United States in 2001, targeting the World Trade Center and the Pentagon.