If Vickers Company Issues 5,000 Shares of $5 Par Value

question 218

Multiple Choice

If Vickers Company issues 5,000 shares of $5 par value common stock for $175,000,

• A) Common Stock will be credited for $175,000.
• B) Paid-In Capital in Excess of Par will be credited for $25,000.
• C) Paid-In Capital in Excess of Par will be credited for $150,000.
• D) Cash will be debited for $150,000.

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Definitions:

Total Assets

The sum of all current and non-current assets owned by a business, reflecting the company's overall financial strength on the balance sheet.

Liabilities

Financial obligations or debts that a company owes to others, due to past transactions or events.

Stockholders' Equity

The residual interest in a corporation's assets after deducting liabilities, representing the ownership stake of shareholders.

Noncumulative Preferred Stock

This type of preferred stock does not entitle its holders to claims on dividends missed in the past if they were not declared in those years.