At the End of Its First Month of Operations, Michael's

question 74

Multiple Choice

At the end of its first month of operations, Michael's Consulting Services, Inc. reported net income of $25,000. They also had account balances of: Cash, $18,000; Office Supplies, $2,000 and Accounts Receivable $10,000. The stockholders' total investment for this first month was $5,000. Calculate the ending balance in Stockholders' Equity to be reported on the Balance Sheet.

• A)$30,000
• B)$25,000
• C)$20,000
• D)$5,000
• E)$7,000

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Definitions:

Abnormal Return

The difference between an investment's actual return and its expected return based on the market or a benchmark's performance.

Economic Return

The total financial gain or loss on an investment or business venture, considering both cash flows and changes in market value.

Market Movements

Fluctuations in the prices of securities within financial markets, influenced by various factors including economic indicators, market sentiment, and political events.

P/E Ratios

The price-to-earnings ratio, a valuation metric comparing the current share price of a company to its per-share earnings.