Rush company''s capital structure

Assignment Help Other Subject

Reference no: EM13186267

Rush Company, Inc. has 1000 shares of stock outstanding. Its paid-in-capital is $700,000 and its E&P is $600,000. It distributed $80,000 to Augusta in return for her 100 shares in a redemption that qualified as a complete termination of Augusta's interest. What is the effect on Rush Company's capital structure?

a. E&P is reduced by $80,000.
b. E&P is reduced by $60,000 and paid-in-capital is reduced by $20,000.
c. E&P is reduced by $10,000 and paid-in-capital is reduced by $70,000.
d. Paid-in-capital is reduced by $80,000.

Reference no: EM13186267

Questions Cloud

Tax results : Rapid, Inc., a cash basis corporation, distributes $30,000 of accounts receivable to Sylvester, an individual shareholder, in cancellation of his stock, pursuant to a plan of complete liquidation. If Sylvester's basis in his stock is $10,000, the tax..

How many first-year students voted democratic : One hundred college students were surveyed after voting in an election involving a Democrat and a Republican. Sixty-six were first-year students, 67 voted Democratic, and 12 were non-first-year students who voted Republican. How many first-year st..

State acetone or methanol will give the best seperation : Which of the following solvents, hexane, methylene chloride, acetone, or methanol will give the best seperation on a TLC plate of a mixture composed of

How many people learned of the sale from exactly : The survey showed that 190 learned about the sale from the radio, 150 from television, 190 from the newspaper, 80 from radio and television, 90 from radio and newspapers, 50 from television and newspapers, and 30 from all three sources. How many p..

Rush company''s capital structure : It distributed $80,000 to Augusta in return for her 100 shares in a redemption that qualified as a complete termination of Augusta's interest. What is the effect on Rush Company's capital structure?

How many female business majors are in the class : Out of 32 students in a finite math class, 20 are male, 20 are business majors, 22 are first-year students, 13 are male business students, 16 are male first-year students, 14 are first-year students who are business majors, and 10 are male first-y..

Determine the expected value of x : Determine the expected value of X

Find the consumer surplus at the new price : Suppose two firms 1 and 2 compete in quantities and face a demand curve p = 100 - q. Suppose firm 1 has a constant marginal cost of 10 while firm 2 has a constant marginal cost of 40. Suppose they produce quantities simultaneously. a. Find q..

State fluoride is toxic element : Fluoride (F-) is toxic element (anion) that can be lethal at 0.20 g/70kg of body weight. But because F- at low levels (1ppm) aids in healthy teeth, municipal water sources normally add this level of fluoride.

User Account

All Pages