Use the Following to Answer Questions

question 6

Multiple Choice

Use the following to answer questions :
Table 7-2
-If $40,000 worth of inventory were destroyed in an accident, what would the company in Table 7-2's new net worth be?

• A)$50,000
• B)$60,000
• C)$90,000
• D)$175,000
• E)None of the above.

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Definitions:

Noncontrolling Interest

A shareholder's equity in a corporation that doesn't give the shareholder a controlling interest, representing a share of equity and earnings not owned by the parent company.

Net Income

The total earnings or profit of a company after subtracting all expenses, including taxes, from its revenues.

Domestic Corporations

Companies that are incorporated and operate within the legal boundaries of a country.

Excess Fair Value

The amount by which the fair value of an asset exceeds its carrying value on the balance sheet, often recognized during business combinations.