A New Company Issues 2,000 Shares of $5 Par Common

question 60

Multiple Choice

A new company issues 2,000 shares of $5 par common stock in exchange for the services of a lawyer during its first month of business.The lawyer's normal fee is $15,000 for similar work.Which of the following would be the impact on the accounting equation if the stock is not currently trading?

• A)A decrease to Common Stock for $10,000
• B)An increase to Common Stock for $15,000
• C)A decrease to Additional Paid-In Capital-Common Stock of $5,000
• D)An increase to Additional Paid-In Capital-Common Stock of $5,000

---

Definitions:

Industrial Diseases

Illnesses and conditions that are a direct result of work or occupational environment.

Harmful Chemicals

Substances that can cause damage or adverse effects to organisms upon exposure.

Asbestos

A group of naturally occurring fibrous minerals that are resistant to heat and corrosion, used in construction materials and textiles but can cause lung diseases when inhaled.

Coal

A fossil fuel formed from the remains of ancient plants, used primarily for electricity generation and steel production.