Which of the Following Transactions Will Not Result in a Deemed

question 92

Multiple Choice

Which of the following transactions will not result in a deemed dividend?

• A)Paying off $500,000 in debt by issuing shares with a fair market value of $525,000.
• B)Redeeming shares for $350,000.The PUC of the shares was $350,000 and the ad-
• Justed cost base was $250,000.
• C)A liquidating dividend is paid to shareholders in the amount of $400,000.At this time, PUC is reduced by $300,000.
• D)A total of $1,000,000 was paid to shareholders as part of a winding-up.The PUC of the shares was $200,000 and there was no capital dividend account balance.

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Definitions:

Revenues

The total income generated by a company from its business activities, typically from the sale of goods or services before any expenses are subtracted.

Expenses

Outflows of resources or incurrences of liabilities that a company undergoes as part of its operations to generate revenue.

Drawings

It refers to the amount of money or the value of goods taken from the business by the owner for personal use.

Withdrawal Of Cash

The act of taking out cash from a business by the owners for personal use.