Question

On January 2, Year 1, Torres Corporation issued 23,000 shares of $15 par-value common stock for $17 per share. Which of the following statements is true?  

The cash account will increase by $345,000.

The paid-in capital in excess of par value account will increase by $46,000.

The common stock account will increase by $391,000.

Total equity will increase by $345,000.

Answer 1

When issueing 23,000, $15 par shares for $17,

cash account will increase by ($17*23,000)$391,000

Common stock will increase by ($15*23,000) $345,000,

paid in capital in excess of par will increase by ($2*23,000) = $46,000. and

total equity will increase by $391,000

in given statements, 3rd one is correct.The paid-in capital in excess of par value account will increase by $46,000.

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