A Firm Has $1,500,000 in Its Common Stock Account and $1,000,000

question 48

Multiple Choice

A firm has $1,500,000 in its common stock account and $1,000,000 in its paid-in capital account. The firm issued 100,000 shares of common stock. What was the original issue price if only one stock issue has ever been sold?

• A) $35 per share
• B) $25 per share
• C) $15 per share
• D) Not enough information to tell

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Definitions:

Demurrer

A motion for dismissal of a case on the grounds that a plaintiff has failed to state a claim for which relief can be granted.

Affirmative Defense

A set of circumstances that indicates that a defendant should not be held liable, even if the plaintiff proves all of the facts in a complaint.

Assumption of the Risk

A legal doctrine where an individual knowingly and voluntarily assumes the risk of an activity, thereby reducing the liability of others.

Demurrer

A legal objection that an opponent's point is irrelevant or invalid, while conceding the factual basis of the point.