Abilene western shop began business on january 1, 2015. the corporate charter authorized issuance of 10,000 shares of $2 par value common stock and 4,000 shares of $8 par value, 6% cumulative preferred stock. abilene issued 2,400 shares of common stock for cash at $20 per share on january 2, 2015. what effect does the entry to record the issuance of stock have on total stockholders' equity? a. increase of $4,800b. decrease of $4,800c. increase of $48,000d. decrease of $48,000

c. Increase of $48,000

Explanation:

The computation of the effect on total stockholders' equity is shown below:

= Number of common stock shares issued  × price per share

= 2,400 shares × $20

= $48,000

Simply we multiply the number of common stock shares issued with the price per share so that we know about the effect on total stockholders' equity

The journal entry to record the issuance of common stock is shown below:

Cash A/c Dr

    To Common Stock

    To  Additional Paid-in Capital in excess of par - Common Stock

(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

d. all of the above are true.

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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