The Executives of Jornaginn Corporation Have Decided They Need to Sell

question 37

Multiple Choice

The executives of Jornaginn Corporation have decided they need to sell 50,000 additional shares of stock to finance their expansion plans.The executives

• A)cannot sell that many shares unless they were authorized initially in the corporate charter.
• B)can sell as many shares as the market will bear.
• C)are limited by the number of shares authorized in the corporate charter,but this number can be increased by amending the charter and paying a fee.
• D)can sell the shares only if the shares have a par value which is close to the current market price.

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Definitions:

Operating Activities

Activities that relate directly to the primary operations of the company, such as production, distribution, marketing, and selling of goods and services.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate the cash from operations.

Accounts Receivable

Represents money owed to a company by customers for products or services sold on credit.

Indirect Method

A method of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash from operating activities.