If 10,000 Shares with Par Value of $15/share Are Issued

question 70

Multiple Choice

If 10,000 shares with par value of $15/share are issued for $20/share,how much will be presented as "common shares" for financial statement purposes?

• A)$10,000
• B)$50,000
• C)$150,000
• D)$200,000

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Definitions:

Daily Operations

The day-to-day activities necessary for a business to function smoothly, including production, sales, and administrative tasks.

Compensating Balance

A minimum account balance that a borrower is required to maintain with a lender as a condition for a loan, intended to compensate the bank for providing the loan or credit line.

Effective Interest Rate

The actual return on an investment or the actual cost of a loan, taking into account the compounding of interest over time, as opposed to the nominal interest rate.

Short-Term Bank Loan

A loan obtained from a bank that has a short repayment period, typically less than one year.