During 2011,Stockton,Inc

question 150

Multiple Choice

During 2011,Stockton,Inc.reported net income of $4,000,declared and paid a cash dividend of $2,000,and issued common stock for $20,000.At December 31,2011,Stockton reported total shareholders' equity of $58,000.What was total shareholders' equity at the beginning of the year,on January 1,2011?

• A)$36,000
• B)$40,000
• C)$58,000
• D)$60,000

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Definitions:

Purchasing-Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to assess the relative value of currencies.

Nominal Exchange Rate

How quickly one currency is swapped for another, without considering inflation adjustments.

Big Mac

A hamburger sold by McDonald's that is often used as an informal measure of purchasing power parity between currencies.

Depreciates

The decrease in value of an asset over time or in response to changes in market conditions.