The Blue Bonnet's 2011 Balance Sheet Showed Net Fixed Assets

question 46

Multiple Choice

The Blue Bonnet's 2011 balance sheet showed net fixed assets of $2.2 million, and the 2012 balance sheet showed net fixed assets of $2.6 million. The company's income statement showed a depreciation expense of $900,000. What was the amount of the net capital spending for 2012?

• A)-$500,000
• B)$400,000
• C)$1,300,000
• D)$1,700,000
• E)$1,800,000

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Definitions:

Equity Ownership

The possession of shares in a company, which represent a claim on the company's assets and earnings.

Poison Pill

A defensive strategy employed by a company's management to prevent or deter hostile takeovers by making the company less attractive to the potential acquirer.

Flip-over Provision

A defensive strategy in a company's charter to deter hostile takeovers, allowing shareholders to buy shares at a discount if a single buyer acquires a significant portion of the company.

Share Rights Plan

A defense strategy used by corporations to deter hostile takeovers, allowing existing shareholders the right to purchase additional shares at a discount.