On January 12,Year 1,Gilliam Corporation issued 550 shares of $12 par-value common stock for $15 per share.The number of shares authorized is 5,000,and the number of shares outstanding prior to this transaction was 1,200.Which of the following describes the effect of the January 12 transaction on the elements of the financial statements?

Question

On January 12,Year 1,Gilliam Corporation issued 550 shares of $12 par-value common stock for $15 per share.The number of shares authorized is 5,000,and the number of shares outstanding prior to this transaction was 1,200.Which of the following describes the effect of the January 12 transaction on the elements of the financial statements?
On January 12,Year 1,Gilliam Corporation issued 550 shares of $12 par-value common stock for $15 per share.The number of shares authorized is 5,000,and the number of shares outstanding prior to this transaction was 1,200.Which of the following describes the effect of the January 12 transaction on the elements of the financial statements? A) Option A B) Option B C) Option C D) Option D

Quizplus · Accepted Answer

Assets (cash)increase by $8,250 (or 550 shares × $15 per share),common stock increases by $6,600 (or 550 shares × Par value of $12 per share),and paid-in excess increases by $1,650 (or $8,250 - $6,600).The cash inflow of $8,250 is reported in the financing activities section of the statement of cash flows.

On January 12,Year 1,Gilliam Corporation Issued 550 Shares of $12