Moretown Company Had the Following Transactions in 2014, Its First

question 60

Multiple Choice

Moretown Company had the following transactions in 2014, its first year of operations.
• Issued 30,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $18.00
Per share.
• Earned net income of $70,000.
• Paid no dividends.
-
At the end of 2014, what is the total amount of Stockholders' equity?

• A) $30,000
• B) $610,000
• C) $540,000
• D) $70,000

---

Definitions:

Positive Wealth

A situation where the total value of all owned assets exceeds any liabilities, leading to a net positive financial position.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows, reflecting the cost of capital or investment risk.

Mutually Exclusive

Scenarios or occurrences that are incapable of happening simultaneously.

Average Accounting Return

A financial ratio indicating the average net income an asset is expected to generate compared to its average capital cost.