Question

Absent an election to close the books, the allocation of nonseparately stated income or loss for an S corporation shareholder that changed his ownership interest during the year is computed based on which of the following ownership percentages? a. Ownership percentage at the end of the S corporation year.b. Ownership percentage at the beginning of the S corporation year.c.Ownership percentage determined as an average of the beginning and ending ownership percentages.d.Ownership percentage computed on a per-share per-day basis.

Answer 1

Answer: D.Ownership percentage computed on a per-share per-day basis.

Explanation: Shareholders' equity represents the net worth of a company, which is the amount that would be returned to shareholders if a company's total assets were liquidated and all of its debts repaid.

This financial metric is frequently used by analysts to determine a company's general financial health.

Shareholders' equity may be calculated by subtracting its total liabilities from its total assets, both of which are itemized on a company's balance sheet.