A Company Issued Rights to Its Existing Shareholders to Purchase,for

question 88

Multiple Choice

A company issued rights to its existing shareholders to purchase,for $30 per share,unissued shares of $15 par value common stock.When the rights lapse,

• A) Additional Paid-In Capital will be credited.
• B) Stock Rights Outstanding will be debited.
• C) Gain on Lapse of Stock Rights will be credited.
• D) no entry will be made.

Understand the concept of present intent to contract and its implications for offer validity.

Learn about the enforceability of contracts under the UCC when actions imply acceptance.

Identify the differences between auctions with and without reserve in terms of offer and acceptance.

Recognize the role of specificity and clarity in the formation and enforceability of contracts.

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Definitions:

Fair Value Measurements

Assessments of the estimated market value of an asset or liability, based on assumptions about risk and the valuation techniques used.

GAAP Hierarchy

A framework that categorizes the importance and authority of different accounting principles and guidelines in the U.S. Generally Accepted Accounting Principles (GAAP).

Valuation Method

Techniques or approaches used to determine the market value of assets, businesses, or financial instruments.

Historical Costs

The original monetary value of an asset or liability, without adjusting for inflation or changes in market value.