James Yachts Has 2,000 Shares Outstanding Each with a Par

question 2

Multiple Choice

James Yachts has 2,000 shares outstanding each with a par value of $0.07. If they are sold to shareholders at $7 each,what would the capital surplus be?

• A) $10,000
• B) $12,140
• C) $13,250
• D) $13.860
• E) $14,000

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Definitions:

Leading Indicator

Economic factors that change before the economy starts to follow a particular pattern or trend, used to predict future economic activity.

Corporate Social Responsibility Objective

A self-regulated business model that helps a company be socially accountable—to itself, its stakeholders, and the public.

Capital Investment

Funds spent by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Land Reclamation

The process of creating new land from oceans, riverbeds, or lake beds, or restoring an area to a more usable state.