During 2008,Lion Corporation Incurs the Following Transactions

question 39

Multiple Choice

During 2008,Lion Corporation incurs the following transactions.

Lion maintains a valid S election and does not distribute any dividends to its sole shareholder,Penny.As a result,Penny must recognize:

• A)Ordinary income of $103,000 and long-term capital gain of $5,000.
• B)Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss.
• C)Ordinary income of $108,000.
• D)None of the above.

Calculate and interpret financial ratios, including liquidity, leverage, and profitability ratios.

Analyze cash flow statements to assess a firm's financial health.

Understand the impact of financial decisions on a firm's financial leverage and risk.

Grasp the concept of depreciation and its role in financial statements.

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