ABC Sells 400 Shares of Its $23 Par Common Stock

question 121

Multiple Choice

ABC sells 400 shares of its $23 par common stock for $27.The entry would entail a credit(s) of:

• A)Cash of $9,200.
• B)Paid-in Capital in Excess of Par-Common for $800; Common Stock for $10,800.
• C)Paid-in Capital in Excess of Par-Common for $1,600; Common Stock for $9,200.
• D)Common Stock for $10,800.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses from revenue, including taxes and interest.

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash.

Net Cash

The amount of cash that remains after accounting for all cash inflows and outflows during a specified period.

Operating Activities

Activities that are directly related to the primary business operations, such as selling products or services and associated costs.