A Company Issued 1,000 Shares of $10 Par Value Common

question 78

Multiple Choice

A company issued 1,000 shares of $10 par value common stock in exchange for $15,000.Which of the following correctly describes the impact of this transaction on the financial statements?

• A)A $15,000 gain is reported on the income statement.
• B)Contributed capital in the amount of $10,000 is reported on the balance sheet.
• C)Common stock is reported on the balance sheet at $15,000.
• D)Additional paid-in capital of $5,000 is reported on the balance sheet.

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Definitions:

Time of the Injury

The specific moment at which an individual is harmed or damaged, often critical in legal contexts.

Corporate Charter

The legal document that establishes a corporation and outlines its structure, objectives, and the authority to operate, also known as articles of incorporation.

Personal Liability

The legal responsibility of an individual to settle debts or obligations from their own assets.

Voting Trust

An agreement among shareholders to transfer their voting rights to a trustee.