ABC Receives a Stock Dividend of 50 Shares from XYZ

question 90

Multiple Choice

ABC receives a stock dividend of 50 shares from XYZ Company. ABC previously owned 500 shares of XYZ stock that had a cost basis of $3,135. The cost basis per share of XYZ stock is:

• A)$60.
• B)$6.96.
• C)$6.00.
• D)$5.70.

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Definitions:

Net Realizable Value

The estimated selling price of goods, minus the costs of their sale or disposal, used in valuing inventory and accounts receivable for financial reporting.

Write-Off

A write-off involves removing an asset from the financial statements because it is no longer collectible or has no value.

Bank Reconciliation

Bank reconciliation involves the process of matching and comparing the account balance in an entity's financial records to the corresponding information on a bank statement, to ensure accuracy and consistency.

NSF Check

A check that cannot be processed because the writer's account does not have sufficient funds, known as a Non-Sufficient Funds check.