presents less than 20 ofthe m es es ting sto on lay 19 0 Wor

presents less than 20% ofthe m es es ting sto on lay 19 0 World-wide Financial Services, n vested S27,000 to acquire 4 000 shares o Dawn investments nc. on March 15 2016 Th s n Financial Services, Inc. sells 2,500 shares for $14,250. In the accounting equation on May 7, 2019 men de O A. total equity will decrease O B. total assets will remain unchanged O C. total liabilities will decrease O D. total assets will increase

Solution

a. buying price = 27,000/4,000 = 6.25

selling price = 14,250/2500 = 5.70 so there is a loss

total equity will decrease

b. depreciation per year = (37000 - 9000)/5 = 5600

gain = 19000 - (37000 - 5600) = -12,400

so loss of 12,400

c. gain = 130,000 - (120,000 + 30,000) = -20,000

loss of 20,000