Which of the Following Is Incorrect for Smith Company When

question 7

Multiple Choice

Which of the following is incorrect for Smith Company when Smith issues 10,000 shares of $10 par value common stock and pays $20,000 cash in exchange for a building? The market price of the Smith stock on the exchange date was $35 per share and the building's book value on the books of the seller was $200,000.

• A) The common stock account increases by $100,000.
• B) The building account increases by $370,000.
• C)Stockholders' equity increases $350,000.
• D)The additional paid-in capital account increases by $100,000.

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Definitions:

Elasticities

Measures in economics that indicate how changes in one variable, such as price or income, affect a change in another variable, such as demand or supply.

Demand Curves

A graph showing the relationship between the price of a good and the quantity of that good that buyers are willing to purchase at various prices.

Supply Curves

Diagrams indicating how the quantity of a product offered by sellers varies with price, illustrating market supply dynamics.

Cigarettes

Narrow cylinders containing psychoactive material, typically tobacco, that are rolled into thin paper for smoking.