Cole Corporation Issues 10,000 Shares of $50 Par Value Preferred

question 176

Multiple Choice

Cole Corporation issues 10,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $600,000 and a credit or credits to

• A) Preferred Stock for $600,000.
• B) Preferred Stock for $500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $100,000.
• C) Preferred Stock for $750,000 and Paid-in Capital from Preferred Stock for $100,000.
• D) Paid-in Capital from Preferred Stock for $600,000.

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Definitions:

Price Discrimination

A pricing strategy where identical or substantially similar goods or services are sold at different prices by the same provider to different consumers.

Single Price

A market condition where all units of a particular good or service are sold at the same price to all buyers.

Price Discrimination

The strategy of selling the same product to different customers at different prices based on the willingness to pay.

Consumer Surplus

The disparity between the amount consumers propose to pay for a good or service and the amount they finally pay.