Question

Item3 1.66 points time remaining 19 minutes 10 seconds 00:19:10 item 3 time remaining 19 minutes 10 seconds 00:19:10 Ogilvie corporation issued 30,000 shares of no-par stock for $40 per share. Ogilvie was authorized to issue 53,000 shares. What effect will this event have on the elements of the company's financial statements?

O increase assets and increase stockholders’ equity by $2,120,000
O increase assets and increase stockholders’ equity by $1,200,000
O increase cash inflows from investing activities by $1,200,000
O none of these answer choices are correct.

Answer 1

Issuing 30,000 shares at $40 each increases Ogilvie Corporation's assets and stockholders' equity by $1,200,000.

Step-by-step explanation:

Ogilvie Corporation Stock Issuance Impact on Financial Statements

When Ogilvie Corporation issued 30,000 shares of no-par stock for $40 per share, it increased its assets and stockholders’ equity. Since Ogilvie was authorized to issue 53,000 shares, the actual issuance event involves only part of the authorized shares. The impact on the financial statements for issuing 30,000 shares at $40 each will be an increase in assets (cash) and an increase in stockholders’ equity by the total amount of money raised through the stock issuance, which is $1,200,000 (30,000 shares x $40 per share).

Therefore, the correct option reflecting this event's impact on Ogilvie Corporation's financial statements is "increase assets and increase stockholders’ equity by $1,200,000".