Below are the 2004 and 2005 year-end balance sheets for Kewell Products: A. Kewe

Question

Below are the 2004 and 2005 year-end balance sheets for Kewell Products:

A. Kewell had negative net income in 2005

B. Kewell issued new common stock in 2005

C. Kewell issued long-term debt in 2005

D. Kewell repurchased some common stock in 2005.

E. Kewell increased its short term debt in 2005

Assets: 2005 2004 Cash $   100,000 $     85,000 Accounts receivable 432,000 350,000 Inventories   1,000,000      700,000      Total current assets $1,532,000 $1,135,000 Net fixed assets   3,000,000   2,800,000 Total assets $4,532,000 $3,935,000 Liabilities and equity: Accounts payable $   700,000 $   545,000 Notes payable      800,000      900,000      Total current liabilities $1,500,000 $1,445,000 Long-term debt 1,200,000 1,200,000 Common stock 1,500,000 1,000,000 Retained earnings      332,000      290,000      Total common equity $1,832,000 $1,290,000 Total liabilities and equity $4,532,000 $3,935,000

Explanation / Answer

As we can see, the common stock has increased from 1,000,000 in 2004 to 1,500,000 in 2005.

So the answer is: B) Kewell issued new common stock in 2005.

Hope this helped ! Let me know in case of any queries.

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