If a company issues 1,000 shares of common stock at a market price of $20 per...
If a company issues 1,000 shares of common stock at a market price of $20 per share, which of the following is the correct balance sheet effect?
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A. |
Increase cash by $20,000 and increase contributed capital by $20,000 |
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B. |
Increase cash by $20,000 and increase earned capital by $20,000 |
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C. |
Increase stock revenues by $20,000 |
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D. |
Stock issuances are not reported on the balance sheet |
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E. |
None of the above |
Homework Answers
Cash raised= 1000 *20 = 20000
Cash will increase by 20000
Also on the liability side contributed capital will increase by 20000
Correct choice A
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