Question

The Wilson Inn sold 10,000 shares of $5.756 ($5 0.756 cents) par value common stock for $30.123 ($30 0.123 cents) per share. how much would be reported as a sale of common stock on the statement of cash flows?

Answer 1

The Wilson Inn's sale of 10,000 shares of common stock at $30.123 per share would result in total proceeds of $301,230. This amount would be reported on the statement of cash flows under financing activities.

Step-by-step explanation:

The student's question involves the computation of the amount to be reported for the sale of common stock on the statement of cash flows. To determine the amount that would be reported as a sale of common stock, you need to multiply the number of shares sold by the price at which each share was sold. The Wilson Inn sold 10,000 shares of common stock at $30.123 per share.

To calculate the total proceeds from the sale, the following equation is used:

• Total proceeds from the sale = Number of shares sold × Sale price per share

By applying this formula:

• Total proceeds from the sale = 10,000 shares × $30.123 per share

This calculation yields the total proceeds as:

• Total proceeds from the sale = $301,230

The amount of $301,230 would be reported on the statement of cash flows under the financing activities section as a sale of common stock.