A Firm Has Just Ended Its Calendar Year Making a Sale

question 117

Multiple Choice

A firm has just ended its calendar year making a sale in the amount of $150,000 of merchandise purchased during the year at a total cost of $112,500. Although the firm paid in full for the merchandise during the year, it is yet to collect at year end from the customer. The net profit and cash flow from this sale for the year are ________.

• A) $0 and $150,000, respectively
• B) $37,500 and -$150,000, respectively
• C) $37,500 and -$112,500, respectively
• D) $150,000 and $112,500, respectively

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Definitions:

Acquisition

The act of one business securing the bulk or all of another company’s equity to take over control.

Shareholders

Individuals or entities that own shares in a corporation, thus holding a portion of the company's equity.

Proxy Contests

A competition for the proxy votes of shareholders, typically aimed at gaining control of the company's board of directors.

Shareholder Votes

The process by which company shareholders exercise their right to vote on corporate matters, typically during annual general meetings.