In 2013 Grace Loaned Her Friend Paula $12,000 to Invest

question 41

Multiple Choice

In 2013 Grace loaned her friend Paula $12,000 to invest in various stocks.Paula signed a note to repay the principal with interest.Unfortunately the market for that industry sector plunged,and Paula incurred large losses.In 2014 Paula declared personal bankruptcy and Grace was unable to collect any of her loan.Grace had no other gains or losses last year or this year.The result is

• A)Grace deducts a business bad debt of $12,000 in 2014.
• B)Grace deducts a $12,000 nonbusiness bad debt as a short-term capital loss in 2014.
• C)Grace deducts a $3,000 nonbusiness bad debt as a short-term capital loss in 2014 and carries $9,000 over to subsequent years.
• D)Grace deducts a business bad debt of $3,000 in 2014 and carries $9,000 over to subsequent years.

Evaluate the risks and rewards associated with brand extensions.

Understand the concept and importance of cognitive fit in brand extensions.

Recognize the role of authenticity in successful brand extension strategies.

Understand the strategic use of fighter brands in protecting market position.

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Definitions:

Total Assets

The sum of all currently owned resources that have value which can be converted into cash and are used in operating the company.

Liabilities

Financial obligations or debts a company owes to others, expected to be settled over time through the transfer of assets, provision of services, or other economic benefits.

Statement of Stockholders' Equity

Financial documentation that shows changes in the value of a company's equity over a reporting period.

Retained Earnings

Retained earnings refer to the portion of a company's profits that are kept or retained within the company for reinvestment or to pay debt, rather than being paid out as dividends.