2. World-wide Financial Services, Inc. invested $27,000 to acquire 4000 shares of Dawn Investments, Inc. on...
2. World-wide Financial Services, Inc. invested $27,000 to acquire 4000 shares of Dawn Investments, Inc. on March 15, 2016. This investment represents less than 20% of the investee's voting stock. On May 7, 2019, World-wide Financial Services, Inc. sells 2500 shares for $14,250. In the accounting equation on May 7, 2019, ________.
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total liabilities will decrease |
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total equity will decrease |
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total assets will increase |
||
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total assets will remain unchanged |
Homework Answers
OPTION: Total equity will decrease
EXPLANATION:
Loss on sale of share = sales value - cost of shares sold
= $14250 - {($27000/4000) x 2500}
= -$2625
loss will cause the equity to decrease.
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