Lerner Company Had the Following Transactions in 2015, Its First

question 143

Multiple Choice

Lerner Company had the following transactions in 2015, its first year of operations. • Issued 20,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $14.00 per share.
• Issued 1,000 shares of $100 par value preferred stock. Shares were issued at par.
• Earned net income of $35,000.
• Paid no dividends.
At the end of 2015, what is the total amount of paid-in capital?

• A)$415,000
• B)$120,000
• C)$280,000
• D)$380,000

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Definitions:

Funds

Financial resources that are allocated for a specific purpose, project, or investment.

Legal Entity

An organization that has legal rights and obligations, including the ability to enter into contracts and own property, separate from its individual members.

Corporation

A legal entity formed by a group of individuals to conduct business or other activities, recognized as separate from its owners with its own rights and liabilities.

Personal Liability

The legal responsibility of an individual to settle his or her debts and obligations, potentially using personal assets.