It is the most correct one. The primary difference between long-term assets and long-term investments in general is it is used in the operations of the business.

Interest paid on borrowed funds would be considered an operating cash flow because interest is reported on the income statement, while dividends paid to stockholders would be a financing cash flow because dividends flow through the retained earnings statement. Interest and dividend income are considered operating cash flow.

$49,000 + $17,000 = $66,000.
The cost of a non-monetary asset acquired in exchange for a dissimilar non-monetary asset is usually recorded at the fair market value of the asset given up, and a gain or loss is recognized (in this case, a gain on disposal of trucks: 49,000 - 42,000 = $7,000).

50,000,000 common shares x 12months = 600,000,000 5,000,000 common shares x 6 months = 30,000,000 = 630,000,000 630,000,000/12 = 52,500,000 average shares [$25,000,000(NI) -
$ 1,000,000(preferred dividends)]/52,500,000 shares = 24,000,000/52,500,000 = 0.457

Original equity = 40% of (2,500 x $70) = (.40)($175,000) = $70,000 Original Loan = 60% of
(2,500 x $70) = (.60)($175,000) = $105,000 Interest on loan = 1/2 of 8% of $105,000 = (1/2)($8,400) =
$ 4,200 C l $105 000 $4 200 $109 200 Current loan = $105,000 + $4,200 = $109,200 Current Equity =
(QP-L) = (2,500 x $71 - $109,200) = $177,500 - $109,200 = $68,300 $ return = $68,300 - $70,000 = -
$ 1,700 (Rate of return = -1,700/70,000= -2.43%)