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E Always Had Eyes for a Deal Despite Some Initial Growth Based on the Idea, the Pizza

Question 47

Multiple Choice

E always had eyes for a deal.When B approached her about his idea of having his chain of pizza parlors deliver video tapes along with pizzas, E saw dollar signs.B needed financing, and E gave the corporation $10,000 in exchange for stock.A summary of the corporation's balance sheet after the exchange revealed the following:  Assets$3,000,000 Liabilities 500,000Retained earnings 1,200,000Capital stock 800,000\begin{array}{lc} \text { Assets} &\$3,000,000\\ \text { Liabilities } &500,000\\ \text {Retained earnings } &1,200,000\\ \text {Capital stock } &800,000\\\end{array} Despite some initial growth based on the idea, the pizza business fell on hard times due to heavy competition.This year E sold her stock at a $9,000 loss, her only property transaction (i.e., sales during the year) .This year, E may deduct how much?


A) $0
B) $3,000
C) $9,000
D) $10,000
E) None of the above

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