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 Corporation’s common stock is trading at $12 per share. A) assuming Juniper Corporation did not issue any more common stock in 2018, how does the increase in value of its outstanding stock affect juniper? (Indicate which lettered statement is correct and why) A) juniper should recognize additional net income from 2018 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 Explanation for your answer (1-3 sentences max)
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 Corporation’s common stock is trading at $12 per share. A) assuming Juniper Corporation did not issue any more common stock in 2018, how does the increase in value of its outstanding stock affect juniper? (Indicate which lettered statement is correct and why) A) juniper should recognize additional net income from 2018 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 Explanation for your answer (1-3 sentences max)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 Corporation’s common stock is trading at $12 per share.
A) assuming Juniper Corporation did not issue any more common stock in 2018, how does the increase in value of its outstanding stock affect juniper? (Indicate which lettered statement is correct and why)
A) juniper should recognize additional net income from 2018 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
Explanation for your answer (1-3 sentences max)
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