ABC Sells 400 Shares of Its $20 Par Common Stock

question 47

Multiple Choice

ABC sells 400 shares of its $20 par common stock for $25.The entry would entail a credit(s) of:

• A)Cash of $10,000.
• B)Paid-in Capital in Excess of Par Value-Common for $8,000;Common Stock for $2,000.
• C)Paid-in Capital in Excess of Par Value-Common for $2,000;Common Stock for $8,000.
• D)Common Stock for $10,000.

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Definitions:

Investing Activity

A category in financial statements that represents cash flows related to the purchase or sale of long-term assets or investments.

Statement Of Cash Flows

A financial statement that highlights the major activities that impact cash flows and, hence, affect the overall cash balance.

Sale Of Equipment

The process of selling off business assets, such as machinery or office equipment, usually to generate cash.

Financing Activity

refers to the transactions related to raising capital and paying back investors, such as issuing debt or equity.