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On January 1, 2006, Venus Corporation issued 60,00...

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On January 1, 2006, Venus Corporation issued 60,000 shares of its total 200,000 authorized shares of $4 par value common stock for $8 per share. On December 31, 2006, Venus Corporation's common stock is trading at $13 per share. Assuming Venus Corporation did not issue any more common stock in 2006, how does the increase in value of its outstanding stock affect Venus?Question 4 options: This increase in market value of outstanding stock is not recorded in the financial statements of Venus Corporation. Each shareholder must pay an additional $5 per share to Venus. Venus should recognize additional net income for 2006 of $5 per share, or $300,000. Paid-in capital at December 31, 2006, is $780,000 (i.e. 60,000 shares times $13 per share

 

Paper#3176 | Written in 18-Jul-2015

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