Moore Industries Began Operations on January 2, 2016, with an Investment

question 202

Multiple Choice

Moore Industries began operations on January 2, 2016, with an investment of $50,000 by each of its two stockholders.Net income for its first year of business was $240,000.Moore Industries paid a total of $100,000 in dividends to its stockholders during the year.
​
-Read the information about Moore Industries.The company's dividends for the year

• A) Reduce the amount of capital stock reported by the company.
• B) Are part of Moore Industries' operating costs.
• C) Are reported on the statement of retained earnings.
• D) Are an expense of Moore Industries.

---

Definitions:

Financial Leverage

The use of borrowed funds to increase the potential return on an investment.

Shareholder Leverage

The use of borrowed funds by shareholders to increase their potential returns from an investment.

Operating Leverage

A measure of how revenue growth translates into growth in operating income due to fixed costs in a company's business model.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on their income or profits.