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:

One-Line Method

A consolidation technique, often used in accounting for investments, where only the net income and not the detailed financial activities of an affiliate are included in the parent company's financial statements.

Jointly Controlled Operations

Business activities where control and management responsibilities are shared among two or more parties, often under a joint venture agreement.

Disclosure

The act of making financial information known to the public, typically through financial statements and other official reports, ensuring transparency and accountability.

Unrealised Profits

Earnings generated on paper from investments or sales yet to be finalized through actual transaction or cash exchange.