Ari's Cafe Began Operations on March 1, 2015

question 42

Multiple Choice

Ari's Cafe began operations on March 1, 2015.The corporate charter authorized the issuance of 3,000 shares of $2 par value common stock and 1,000 shares of $3 par value, 8% cumulative preferred stock.The company's fiscal year ends on February 28.Ari's sold 500 shares of common stock at $6 per share on April 1.What impact does the entry to record the April 1 transaction have on total stockholders' equity?

• A)No effect
• B)Increase by $1,000
• C)Increase by $3,000
• D)Increase by $6,000

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