Moretown Company Had the Following Transactions in 2015, Its First

question 121

Multiple Choice

Moretown Company had the following transactions in 2015, its first year of operations. • Issued 30,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $18.00 per share.
• Earned net income of $70,000.
• Paid no dividends.
At the end of 2015, what is the total amount of stockholders' equity?

• A)$30,000
• B)$610,000
• C)$540,000
• D)$70,000

---

Definitions:

Stock Options

Contracts that give the holder the right, but not the obligation, to buy or sell a stock at a specific price before a certain date.

High-Growth Companies

Entities that experience significantly higher rates of growth compared to the average growth rate of their industry.

IFRS

The International Financial Reporting Standards are globally accepted rules intended to bring consistency to accounting language, practices, and statements across all industries.

Preference Shares

Shares that give holders a priority over common stockholders in terms of receiving dividends and assets in the event of a liquidation, often without voting rights.