May,IncHad the Following Transactions in 2019,its First Year of Operations

question 23

Multiple Choice

May,Inc.had the following transactions in 2019,its first year of operations: • Issued 20,000 shares of common stock.The stock has a par value of $3.00 per share and was issued at $19.00 per share.
• Issued 2000 shares of $200 par value preferred stock at par.
• Earned net income of $40,000.
• Paid no dividends.
At the end of 2019,what is the total amount of paid-in capital?

• A) $820,000
• B) $460,000
• C) $380,000
• D) $780,000

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Definitions:

Total Compensation Cost

It encompasses the complete value of all compensatory payments and benefits provided to employees, including salaries, bonuses, and benefits.

Fair Value

Fair value is the estimated market price of an asset or liability, reflecting its current value in an orderly transaction between willing market participants.

Vested Options

Stock options granted to an employee that the employee has the right to exercise, contingent upon fulfilling certain conditions such as employment duration.