Ix company issued 20,000 shares of 20$ par value stock at a market price of 32$.

Question

Ix company issued 20,000 shares of 20$ par value stock at a market price of 32$. As a result of this accounting event, the amount of stockholders equity would: A: increase by 640,000$ B: be unaffected C: increase by 400,000$ D: increase by 240,000$ Ix company issued 20,000 shares of 20$ par value stock at a market price of 32$. As a result of this accounting event, the amount of stockholders equity would: A: increase by 640,000$ B: be unaffected C: increase by 400,000$ D: increase by 240,000$ A: increase by 640,000$ B: be unaffected C: increase by 400,000$ D: increase by 240,000$

Explanation / Answer

The stockholders equity would increase by the issue price of the share.

Issue price = 20000 * $32 = $640000

Thus the stockholders equity would increase by $640000

Option A is correct

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