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Business
Accounting
Movearound Pty Ltd had losses in Year 1. It, therefore, changed its business in Year 2 from being a removalist to building renovations. Shares were issued to new shareholders in Years 2 and 3 to fund the new business as follows: Shares Shares Shares Shareholder Year 1 Year 2 Year 3 Pushin Shove Groan Mozzy 2 2 4 4 7 8642 State which of the following statement is correct? Losses from Year 1 can be offset against profits in Years 2 and 3 Losses from Year 1 cannot be offset against profits in Years 2 or 3 Losses from Year 1 can be offset against profits in 3 only Losses from Year 1 can be offset against profits in any years going forward as the company satisfies the similar business test. If there were losses in Year 2, it could be offset against Year 3 profits. If there were losses in Year 2, it could not be offset against Year 3 profits.

Movearound Pty Ltd had losses in Year 1. It, therefore, changed its business in Year 2 from being a removalist to building renovations. Shares were issued to new shareholders in Years 2 and 3 to fund the new business as follows: Shares Shares Shares Shareholder Year 1 Year 2 Year 3 Pushin Shove Groan Mozzy 2 2 4 4 7 8642 State which of the following statement is correct? Losses from Year 1 can be offset against profits in Years 2 and 3 Losses from Year 1 cannot be offset against profits in Years 2 or 3 Losses from Year 1 can be offset against profits in 3 only Losses from Year 1 can be offset against profits in any years going forward as the company satisfies the similar business test. If there were losses in Year 2, it could be offset against Year 3 profits. If there were losses in Year 2, it could not be offset against Year 3 profits.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Movearound Pty Ltd had losses in Year 1. It, therefore, changed its business in Year 2 from being a removalist to building renovations. Shares were issued to new shareholders in Years 2 and 3 to fund the new business as follows: Shares Shares Shares Shareholder Year 1 Year 2 Year 3 Pushin Shove Groan Mozzy 2 2 4 4 7 8642 State which of the following statement is correct? Losses from Year 1 can be offset against profits in Years 2 and 3 Losses from Year 1 cannot be offset against profits in Years 2 or 3 Losses from Year 1 can be offset against profits in 3 only Losses from Year 1 can be offset against profits in any years going forward as the company satisfies the similar business test. If there were losses in Year 2, it could be offset against Year 3 profits. If there were losses in Year 2, it could not be offset against Year 3 profits.
Transcribed Image Text:Movearound Pty Ltd had losses in Year 1. It, therefore, changed its business in Year 2 from being a removalist to building renovations. Shares were issued to new shareholders in Years 2 and 3 to fund the new business as follows: Shares Shares Shares Shareholder Year 1 Year 2 Year 3 Pushin Shove Groan Mozzy 2 2 4 4 7 8642 State which of the following statement is correct? Losses from Year 1 can be offset against profits in Years 2 and 3 Losses from Year 1 cannot be offset against profits in Years 2 or 3 Losses from Year 1 can be offset against profits in 3 only Losses from Year 1 can be offset against profits in any years going forward as the company satisfies the similar business test. If there were losses in Year 2, it could be offset against Year 3 profits. If there were losses in Year 2, it could not be offset against Year 3 profits.
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