What Is the Carrying Value of the Liability Appearing on the December

question 63

Multiple Choice

What is the carrying value of the liability appearing on the December 31,Year 1 balance sheet?

• A)$80,400
• B)$87,600
• C)$90,000
• D)$88,800

---

Definitions:

Treasury Stock

Stocks that the company originally issued and then bought back, decreasing the total number of shares available for trading on the public market.

Common Stock

Represents ownership shares in a corporation, giving holders a claim on part of the company's profits in the form of dividends and voting rights.

Par Value

The face value or nominal value of a security as stated by the issuer, often used in reference to stocks and bonds.

Federal Agency

A government organization established to perform a specific function or range of functions at the national level.