Issuing Par Value Stock Video Lessons

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Problem: First Watch, Inc. began its operations in 2006. During the year, shareholders paid in $200,000 in exchange for 40,000 shares of $1 par, common stock. For the 2006 year, First Watch reported net income of $200,000 and paid out $50,000 in dividends. Which of the following will be reported on the December 31, 2006 Balance Sheet? a. Retained Earnings, $350,000 b. Total Stockholders’ Equity, $310,000 c. Additional Paid-in-Capital, $200,000 d. Common Stock, $40,000

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First Watch, Inc. began its operations in 2006. During the year, shareholders paid in $200,000 in exchange for 40,000 shares of $1 par, common stock. For the 2006 year, First Watch reported net income of $200,000 and paid out $50,000 in dividends. Which of the following will be reported on the December 31, 2006 Balance Sheet?

a. Retained Earnings, $350,000

b. Total Stockholders’ Equity, $310,000

c. Additional Paid-in-Capital, $200,000

d. Common Stock, $40,000

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