Hazeltine Company Issued Common Stock for $200,000 Cash

question 96

Multiple Choice

Hazeltine Company issued common stock for $200,000 cash. As a result of this event, which of the following statements is true?

• A) Assets increased.
• B) Stockholders' equity increased.
• C) Claims increased.
• D) Assets, claims, and stockholders' equity all increased.

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Definitions:

Fair Value

The market-based measurement of the value of an asset or liability based on current transactions between willing parties, outside of a forced liquidation or distress sale.

Acquisition Method

An accounting technique used in consolidations that involves recording the assets and liabilities of a company being acquired at their fair value at the date of acquisition.

Consolidated Balance Sheet

A financial statement that aggregates the total assets, liabilities, and equity of a parent company and its subsidiaries.

Stockholders' Equity

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