Knowledge check 02 mountain top, inc., owns a coal mine with a depletion rate of $4 per ton of coal. a total of 100,000 tons were mined, but only 80,000 tons were sold during the current year. complete the necessary journal entry by selecting the account names and dollar amounts from the drop-down menus. date account title debit credit dec. 31

Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.