HRM Consulting Pty Ltd Started the Year with Total Assets

question 24

Multiple Choice

HRM Consulting Pty Ltd started the year with total assets of $80 000 and total liabilities of $40 000.During the year the business earned $150 000 in income and incurred $95 000 in expenses.Dividends of $20 000 were paid during the year.HRM's profit for the period was:

• A) $55 000
• B) $40 000
• C) $30 000
• D) $35 000

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Definitions:

Unprofitable Operations

Business activities that result in a net loss rather than generating profit for the company.

Leveraged Buyout

A transaction where a company is acquired using a significant amount of borrowed money to meet the cost of acquisition.

Going-Private Transactions

All publicly owned stock in a firm is replaced with complete equity ownership by a private group.

Incumbent Management

The current team or individual responsible for managing and making key decisions in an organization.