Question

Carson Packaging Corporation began business in 2018 by issuing 30,000 shares of $3 par common stock for $8 per share and 12,000 shares of 6%, $10 par preferred stock for par. At year end, the common stock had a market value of $12. On its December 31, 2018, balance sheet, Carson Packaging would report:_____.
A. Common Stock of $240,000.
B. Paid-In Capital of $90,000.
C. Common Stock of $90,000.
D. Common Stock of $360,000.

Answer 1

Answer:

The correct option is C, common stock of $90,000

Explanation:

The cash proceeds from the issue of common stock are $240,000.00 (30,000*$8).

The amount is further broken down into common stock  of  $90,000 ($3*30,000) and $150,000 ($240,000-$90,000) in  paid-in capital in excess of par value as at the time of the stock issuance.

The correct option as a result of the analysis above is C, common stock of $90,000