Penny's Cafe began operations on March 1,2012.The corporate charter authorized the issuance of 3,000 shares of $2 par value common stock and 1,000 shares of $3 par value,8% cumulative preferred stock.The company's fiscal year ends on February 28.Penny's sold 500 shares of common stock at $6 per share on April 1.What impact does the entry to record the April 1 transaction have on total stockholders' equity?

Question

Quizplus · Accepted Answer

The sale of 500 shares of common stock at $6 per share results in an increase in total stockholders' equity by $3,000 (500 shares x $6 per share).

Penny's Cafe Began Operations on March 1,2012