Alma Corp Issues 1,000 Shares of $10 Par Value Common Stock

question 139

Multiple Choice

Alma Corp. issues 1,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to:

• A) Common Stock $14,000.
• B) Common Stock $10,000 and Paid-in Capital in Excess of Par Value $4,000.
• C) Common Stock $4,000 and Paid-in Capital in Excess of Stated Value $10,000.
• D) Common Stock $10,000 and Retained Earnings $4,000.

Differentiate between void, voidable, and executory contracts.

Explain the role and importance of standardized contracts in modern commerce.

Analyze the significance of the evolution of contract law in the context of business practices.

Evaluate legal doctrines that support fair dealing and protect parties in contract law.

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Definitions:

P/E Ratio

Price-to-earnings ratio, a valuation metric for determining the relative worth of a company's shares by dividing stock price by earnings per share.

Cost of Equity

The return that investors require for investing in a company's equity, reflecting the risk of the investment.

Earnings Per Share

A metric used to determine a portion of a company's profit allocated to each outstanding share of common stock, calculated as net income divided by the number of shares.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with fixed dividends.