Reason for issue of common stock. Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.

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Answer 1

Question

Chapter 14, Problem 14.1PQ1

Summary Introduction

To determine:

Reason for issue of common stock.

Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.

Expert Solution & Answer

Answer to Problem 14.1PQ1

Solution:

Company issue common stock to raise capital and they prefer to issue common stock because they don’t have to give principal amount back and dividend is not mandatory.

Explanation of Solution

Company issue common stock because they want to raise capital to run company. They prefer financing from common stock because of these reasons,

No repayment of principal amount: While issuing the common stocks, a company doesn’t have to pay back the principal amount in future that they received from common stockholders.
Dividend not mandatory: The other reason for the issue of common stock is that they don’t have to give a dividend every year to shareholder. They can give dividend whenever they want. Although company tries to give dividend regularly to maintain its goodwill.

Hence, company likes to issue common stock because of the benefit of not paying principal amount back and dividend is not mandatory.

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Students have asked these similar questions

3-7. (Working with an income statement and balance sheet) Prepare a balance sheet and income statement for Kronlokken Company from the following scrambled list of items. a. Prepare a common-sized income statement and a common-sized balance sheet. Interpret your findings. Depreciation expense $66,000 Cash 225,000 Long-term debt 334,000 Sales 573,000 Accounts payable 102,000 General and administrative expense 79,000 Buildings and equipment 895,000 Notes payable 75,000 Accounts receivable 153,000 Interest expense 4,750 Accrued expenses 7,900 Common stock 289,000 Cost of goods sold 297,000 Inventory 99,300 Taxes 50,500 Accumulated depreciation 263,000 Prepaid expenses 14,500 Taxes payable 53,000 Retained earnings 262,900 ||

x3-3. (Preparing an income statement) Prepare an income statement and a common- sized income statement from the following information. MyLab Sales Cost of goods sold General and administrative expenses Depreciation expenses Interest expense Income taxes $525,000 200,000 62,000 8,000 12,000 97,200

3-9. (Working with a statement of cash flows) Given the following information, prepare LO3 a statement of cash flows. Increase in accounts receivable Increase in inventories Operating income Interest expense Increase in accounts payable Dividends $25 30 75 25 25 15 20 Increase in net fixed assets 23 Depreciation expense Income taxes 12 17 Beginning cash 20 Increase in common stock

Answer 2

Question

Chapter 14, Problem 14.1PQ1

Summary Introduction

To determine:

Reason for issue of common stock.

Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.

Expert Solution & Answer

Answer to Problem 14.1PQ1

Solution:

Company issue common stock to raise capital and they prefer to issue common stock because they don’t have to give principal amount back and dividend is not mandatory.

Explanation of Solution

Company issue common stock because they want to raise capital to run company. They prefer financing from common stock because of these reasons,

No repayment of principal amount: While issuing the common stocks, a company doesn’t have to pay back the principal amount in future that they received from common stockholders.
Dividend not mandatory: The other reason for the issue of common stock is that they don’t have to give a dividend every year to shareholder. They can give dividend whenever they want. Although company tries to give dividend regularly to maintain its goodwill.

Hence, company likes to issue common stock because of the benefit of not paying principal amount back and dividend is not mandatory.

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Answer 3

Question

Chapter 14, Problem 14.1PQ1

Summary Introduction

To determine:

Reason for issue of common stock.

Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.

Expert Solution & Answer

Answer to Problem 14.1PQ1

Solution:

Company issue common stock to raise capital and they prefer to issue common stock because they don’t have to give principal amount back and dividend is not mandatory.

Explanation of Solution

Company issue common stock because they want to raise capital to run company. They prefer financing from common stock because of these reasons,

No repayment of principal amount: While issuing the common stocks, a company doesn’t have to pay back the principal amount in future that they received from common stockholders.
Dividend not mandatory: The other reason for the issue of common stock is that they don’t have to give a dividend every year to shareholder. They can give dividend whenever they want. Although company tries to give dividend regularly to maintain its goodwill.

Hence, company likes to issue common stock because of the benefit of not paying principal amount back and dividend is not mandatory.

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Answer 4

Question

Chapter 14, Problem 14.1PQ1

Summary Introduction

To determine:

Reason for issue of common stock.

Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.

Expert Solution & Answer

Answer to Problem 14.1PQ1

Solution:

Company issue common stock to raise capital and they prefer to issue common stock because they don’t have to give principal amount back and dividend is not mandatory.

Explanation of Solution

Company issue common stock because they want to raise capital to run company. They prefer financing from common stock because of these reasons,

No repayment of principal amount: While issuing the common stocks, a company doesn’t have to pay back the principal amount in future that they received from common stockholders.
Dividend not mandatory: The other reason for the issue of common stock is that they don’t have to give a dividend every year to shareholder. They can give dividend whenever they want. Although company tries to give dividend regularly to maintain its goodwill.

Hence, company likes to issue common stock because of the benefit of not paying principal amount back and dividend is not mandatory.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 14, Problem 14.1PQ1

Summary Introduction

To determine:

Reason for issue of common stock.

Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.

Expert Solution & Answer

Answer to Problem 14.1PQ1

Solution:

Company issue common stock to raise capital and they prefer to issue common stock because they don’t have to give principal amount back and dividend is not mandatory.

Explanation of Solution

Company issue common stock because they want to raise capital to run company. They prefer financing from common stock because of these reasons,

No repayment of principal amount: While issuing the common stocks, a company doesn’t have to pay back the principal amount in future that they received from common stockholders.
Dividend not mandatory: The other reason for the issue of common stock is that they don’t have to give a dividend every year to shareholder. They can give dividend whenever they want. Although company tries to give dividend regularly to maintain its goodwill.

Hence, company likes to issue common stock because of the benefit of not paying principal amount back and dividend is not mandatory.

Answer 6

Chapter 14, Problem 14.1PQ1

Summary Introduction

To determine:

Reason for issue of common stock.

Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.

Expert Solution & Answer

Answer to Problem 14.1PQ1

Solution:

Company issue common stock to raise capital and they prefer to issue common stock because they don’t have to give principal amount back and dividend is not mandatory.

Explanation of Solution

Company issue common stock because they want to raise capital to run company. They prefer financing from common stock because of these reasons,

No repayment of principal amount: While issuing the common stocks, a company doesn’t have to pay back the principal amount in future that they received from common stockholders.
Dividend not mandatory: The other reason for the issue of common stock is that they don’t have to give a dividend every year to shareholder. They can give dividend whenever they want. Although company tries to give dividend regularly to maintain its goodwill.

Hence, company likes to issue common stock because of the benefit of not paying principal amount back and dividend is not mandatory.

Answer 7

Chapter 14, Problem 14.1PQ1

Summary Introduction

To determine:

Reason for issue of common stock.

Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.

Answer 8

Expert Solution & Answer

Answer to Problem 14.1PQ1

Solution:

Company issue common stock to raise capital and they prefer to issue common stock because they don’t have to give principal amount back and dividend is not mandatory.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Company issue common stock because they want to raise capital to run company. They prefer financing from common stock because of these reasons,

No repayment of principal amount: While issuing the common stocks, a company doesn’t have to pay back the principal amount in future that they received from common stockholders.
Dividend not mandatory: The other reason for the issue of common stock is that they don’t have to give a dividend every year to shareholder. They can give dividend whenever they want. Although company tries to give dividend regularly to maintain its goodwill.

Hence, company likes to issue common stock because of the benefit of not paying principal amount back and dividend is not mandatory.

Answer 12

Ch. 14 - Prob. 14.1PQ1 Ch. 14 - Prob. 14.1PQ2 Ch. 14 - Prob. 14.1PQ3 Ch. 14 - Prob. 14.1PQ4 Ch. 14 - Prob. 14.2PQ1 Ch. 14 - Prob. 14.2PQ2 Ch. 14 - Prob. 14.2PQ3 Ch. 14 - Prob. 14.3PQ1 Ch. 14 - Prob. 14.3PQ2 Ch. 14 - Prob. 14.3PQ3

Reason for issue of common stock. Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.

To determine: Reason for issue of common stock. Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.

Answer to Problem 14.1PQ1

Explanation of Solution

Want to see more full solutions like this?

Chapter 14 Solutions

To determine:

Reason for issue of common stock.

Introduction: Common stock refers to a type of security which has ownership rights too. Common stockholders are the owners of the company. Common stock consists of highest risk among the securities issued by a company.