Question

Thurman Corporation issued 580,000 shares of $0.50 par value capital stock at its date of incorporation for cash at a price of $4.5 per share. During the first year of operations, the company earned $200,000 and declared a dividend of $49,000. At the end of this first year of operations, the balance of the Common Stock account is:

Answer 1

As Common stocks are recorded at par vale and remaining amount should be discount or premium on the issue of share. Hence Common stocks balance is calculated by just multiplying Number of shares by par value of each share

Therefore,
Common stocks balance = 580,000 shares x $0.50 per share
                                       = $290,000