0
What else can I help you with?
When common stock is issued in exchange for an asset that is not cash the transaction should be recorded at?
When common stock is issued in exchange for an asset that is not cash, the transaction should be recorded at the fair market value of the asset received or the fair value of the stock issued, whichever is more clearly evident. If the fair value of both the stock and the asset can be determined, the transaction is typically recorded using the fair value of the asset. This ensures that the financial statements reflect an accurate representation of the value exchanged in the transaction.
Issuing shares of stock in exchange for cash is an example of?
financing activity
How do corporations raise cash?
In addition to issuing bonds, corporations may borrow directly from any loan source, such as banks. On occasion, corporations raise needed cash by authorizing and selling additional stock.
Does issuing capital stock in exchange for cash decrease or increase stockholder's equity?
Issuing capital stock in exchange for cash increases stockholders' equity. This is because it adds to the equity section of the balance sheet, as new shares are created and sold, contributing to the total capital of the company. The cash received boosts the company's assets while simultaneously increasing its equity, thereby enhancing the overall financial position.
What is the porpose of a company issuing stock?
Main purpose for issuing more stock is to get more cash to run the business and to invest in good opportunities or to fulfil the working capital requirements.
Whats is the Journal entery for costs of issuing stock?
Debit Capital stock xx Credit Cash xx Generally you would offset costs of issuing common or preferred stock against the similar equity account.
Received cash on account 300 which part of assets increase?
The answer is in your question actually. If you received cash on account the asset of CASH will increase, while the asset of Account Receivable will decrease.Since you received cash it is assumed that they paid you cash on a balance that they owed you, so the journal entry would be a debit to cash (increase) and a credit to accounts receivable (decrease)
The acquisition of land by issuing common stock is?
a noncash transaction which is not reported in the body of statement of cash flows
Are cash sales an asset?
The cash derived from the sales would be the asset. While the term "cash sales" (as opposed to credit sales) may appear on an income statement or a cash flow statement in the plus column, the cash received would appear as an asset on the balance sheet or financial statement.
What is a journal entry to buy equipment with common stock?
Equipment is not actually bought using common stock rather it is purchased from cash by issuing common stock so journal entry is : [Debit] Equipment [Credit] Cash / bank
Does the acquisition of treasury stock increase cash?
Treasury stock is stock that the issuing company buys back from the shareholders. Since the company is buying back its own shares, it decreases cash and stockholder equity, but increases a new balance called "Treasury Stock".
What is the journal entry to purchase asset from general reserve?
General reserves need to be converted into cash first by issuing new shares to share holders and after that cash can be used to purchase assets.
