Use the Following Information to Answer the Question Below $\begin{array}{l}\text { Equipment } &160,000\\\text { Common Stock }&&160,000\end{array}$

question 145

Multiple Choice

Use the following information to answer the question below. When Calvert Corporation was formed on January 1,2010,the corporate charter provided for 50,000 shares of $20 par value common stock.The following transactions were among those engaged in by the corporation during its first month of operation:
1) The corporation issued 200 shares of stock to its lawyer in full payment of the $5,000 bill for assisting the company in drawing up its articles of incorporation and filing the proper papers with the state agency.
2) The company issued 8,000 shares of stock at a price of $25 per share.
3) The company issued 8,000 shares of stock in exchange for equipment that had a fair market value of $160,000.
The entry to record transaction 3 would be:

• A)
• \(\begin{array}{l}
• \text { Equipment } &160,000\\
• \text { Common Stock }&&160,000
• \end{array}\)
• B)
• \(\begin{array}{l}
• \text { Common Stock } &160,000\\
• \text { Equipment }&&160,000
• \end{array}\)
• C)
• \(\begin{array} { l r r }
• \text { Additional Paid-in Capital } & 35,000 & \\
• \text { Equipment } & 125,000 & \\
• \quad \text { Common Stock } & & 160,000
• \end{array}\)
• D)
• \(\begin{array}{l}
• \text { Cash } &160,000\\
• \text { Equipment }&&160,000
• \end{array}\)

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Definitions:

Portfolio Management

The science and art of making decisions about investment mix and policy, matching investments to objectives, asset allocation, and balancing risk against performance.

Asset Value

The value of a company's assets, often used in determining its worth or the value of its shares.

Expected Excess Return

The additional return investors anticipate receiving on an investment over the risk-free rate as compensation for taking on higher risk.

Expected Return

The forecasted amount of profit or loss an investment is likely to generate over a given period.