Century Corporation issued 400,000 shares of $4 par value common stock at the time of its incorporation. The stock was issued for cash at a price of $16 per share. During the first year of operations, the company sustained a net loss of $100,000. The year-end balance sheet would show the balance of the Common Stock account to be:

Balance of the Common Stock account = $1,600,000

Given:

Number of stock = 400,000 shares

Value of each share = $4

Issue price = $16

Net loss = $100,000

Find:

Balance of the Common Stock account

Computation:

Balance of the Common Stock account = Number of stock × Value of each share

Balance of the Common Stock account = 400,000 × $4

Balance of the Common Stock account = $1,600,000

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Explanation: