Question

Cerner Corporation began business by issuing 250,000 shares of $5 par value common stock for $24 per share. During its first year, the corporation sustained a net loss of $50,000. The year-end balance sheet would showa. Common Stock of $1,250,000.b. Common Stock of $6,000,000.c. total paid-in capital of $5,950,000.d. total paid-in capital of $4,750,000.

Answer 1

Answer:

$1,250,000

Explanation:

General Journal

Date         Details and Account titles         Debit                       Credit

                Bank (250,000 *24)               $6,000,000

                Common stock (250,000 *$5)                                  $1,250,000

       Common stock paid-in Capital in excess of par value     $4,750,000

It is prudent to realize that in the balance sheet, common stock is reported at its face or par value. This is in disregard of the price at which it is issued. In the balance sheet, therefore, common stock will be reported at a value of $1,250,000