Majestic Corp has opted to seek funds by issuing stock in order to expand operations. The company's board of directors has approved the issuance of 100,000 shares of common stock on May 1, 2020. The common stock has a par value of $0.25 and a market value of $5 as of the date of issue. On May 1, 2020, how much will Opus Corp register as Common Stock?

Majestic Corp has opted to seek funds by issuing stock in order to expand operations. The company's board of directors has approved the issuance of 100,000 shares of common stock on May 1, 2020. The common stock has a par value of $0.25 and a market value of $5 as of the date of issue. On May 1, 2020, how much will Opus Corp register as Common Stock?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Opus Corp has decided to issue equity in order to raise capital to expand operations. The company has received approval from the board of directors to issue 100,000 shares of the company’s common stock on May 1, 2020. On the date of issue, the common stock has a par value of $0.25 and a market value of $5. What amount will Opus Corp record as Common Stock on May 1, 2020?
One million (1,000,000) shares of stock were issued to the founders of a start-up company on January 1, 2019. On July 1, 2019, the firm raised $500,000 from outside investors and issued 500,000 of convertible preferred stock with a conversion price of $1 per share (ROUND 1). At the time capital was raided, the investors insisted on a FIVE YEAR vesting schedule for the founders’ initial equity interest, with vesting on a monthly basis (1/60 of the founders’ interest vests each month); and weighted average anti-dilution protection in the case of a subsequent DOWN ROUND. Operations during the first eighteen months have been sluggish, and the company needs additional capital to continue operations and grow the firm’s sales and value. A second set of outside investors is willing to provide $1,300,000 in return for 2,000,000 shares of convertible preferred stock (ROUND 2). For purposes of this problem, today is July 1, 2020. As of July 1, 2020, what percentage interests would the three…
Flexsteel acquired 1,000 shares of its $1 par value stock for $44 per share on April 4, 2019 and held these shares in treasury. On March 1, 2020, the company resold all the treasury shares for $40 per share. What is the journal entry would be recorded when Flexsteel resells the shares of treasury stock?
On January 1, 2018, Juniper Corporation issued 60,000 shares of its total 200,000 authorized shares of $4 par value common stock for $8 per share. On December 31, 2018, Juniper Corporations common stock is trading 12$ per share. Assuming Juniper Corporation did not issue any more common stock in 2018, how does the increase in value of its outstanding stock affect Juniper and why? a) Juniper should recognize additional net income for 2028 of $4 per share, or $240,000 b) Paid in capital at December 31, 2018 is $720,000 (i.e., 60,000 shares times $12 per share) c) This increase in market value of outstanding stock is not recorded in the financial statements of Juniper Corporation d) each shareholder must pay an additional $4 per share to juniper
Copley Corporation is preparing their financial statements for the year ending February 28, 2022. Copley Corporation has two categories of stock: Preferred and Common. The preferred stock is structured such that the holders of the preferred stock may convert one share of preferred stocks into one share of common stock if the market price of the common stock is greater than $1,000. As of February 28, 2022, the market price of the common stock had never reached $1,000. In the preparation of the 2/28/22 Income Statement Copley’s staff accountant was calculating the Basic and Diluted EPS. While calculating the diluted EPS the staff accountant is unsure of whether to include the potential impact of the convertible preferred stock since the trigger conversion price had not been met as of 2/28/22. Based upon your response above calculate Basic & Diluted EPS using the following information: (round all calculations to the second decimal place… do not use dollar signs in your answer)…
In 2020, Eklund, Inc., issued for $103 per share, 90,000 shares of $100 par value convertible preferred stock. One share of preferred stock can be converted into three shares of Eklund's $25 par value common stock at the option of the preferred stockholder. In August 2021, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $30 per share. What total amount should be credited to additional paid-in capital from common stock as a result of the conversion of the preferred stock into common stock? a. $2,250,000 b. $2,520,000 c. $1,170,000 d. $1,530,000
Part AIn late 2020, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 4,000,000 shares of common stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2021, 2,000,000 shares of the common stock are issued in exchange for cash at an average price of $12 per share. Also on January 2, all 1,000,000 shares of preferred stock are issued at $30 per share. Required:1. Prepare journal entries to record these transactions.2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2021. (Assume net income for the first quarter 2021 was $1,300,000.)
During 2020, Empresas ABC issued 4,000 preferred shares with a par value of $ 10 to $ 11 each. Each preferred share can be exchanged at the option of the holder (investor) for three common shares of ABC with a par value of $ 1. In August 2021, all preferred shares were exchanged. At that time the market value of the common stock was $ 5 per share. What amount must ABC credit to the Capital account contributed in excess of the value for common shares? a. $32,000 b. $48,000 c. 0 d. $44,000
Check my work ! Required information [The following information applies to the questions displayed below.] On January 1, 2019, Metco Inc. reported 268,000 shares of $5 par value common stock as being issued and outstanding. On March 24, 2019, Metco Inc. purchased for its treasury 2,500 shares of its common stock at a price of $39.00 per share. On August 19, 2019, 750 of these treasury shares were sold for $45.00 per share. Metco's directors declared cash dividends of $0.40 per share during the second quarter and again during the fourth quarter, payable on June 30, 2019, and December 31, 2019, respectively. A 3% stock dividend was issued at the end of the year. There were no other transactions affecting common stock during the year. Required: a-1. Use the horizontal model for the treasury stock purchase on March 24, 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Balance Sheet Income Statement Assets…
Please help me
One million (1,000,000) shares of stock were issued to the founders of a start-up company on January 1, 2019. On July 1, 2019, the firm raised $500,000 from outside investors and issued 500,000 of convertible preferred stock with a conversion price of $1 per share (ROUND 1). At the time capital was raided, the investors insisted on a FIVE YEAR vesting schedule for the founders’ initial equity interest, with vesting on a monthly basis (1/60 of the founders’ interest vests each month); and weighted average anti-dilution protection in the case of a subsequent DOWN ROUND. Operations during the first eighteen months have been sluggish, and the company needs additional capital to continue operations and grow the firm’s sales and value. A second set of outside investors is willing to provide $1,300,000 in return for 2,000,000 shares of convertible preferred stock (ROUND 2). For purposes of this problem, today is July 1, 2020. How many shares will Round 1 investors get if they convert their…
In 2024, Blossom, Inc. issued 91000 shares of $100 par value convertible preferred stock for $102 per share. Each share of preferred stock can be converted into three shares of Blossom's $25 par value common stock at the option of the preferred stockholder. In August 2025, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $30 per share. What amount will be credited to additional paid-in capital from common stock as a result of the conversion? $2457000 O $2275000 O $1456000 O $1092000