CAPITAL STOCK AND EQUITY. On January 1, 19x9, Wiley Manufacturing has assets, liabilities, and equity of $1,000,000, $250,000, and $750,000, respectively. The following day, stockholders contribute cash and other assets totaling $450,000 to the business in exchange for newly issued shares of stock.

REQUIRED:

1. Calculate the amount of assets, liabilities, and equity immediately after this exchange.

2. If equity on January 1, 19x9, was composed of capital stock of $400,000 and retained earnings of $350,000, what is its composition immediately after the exchange?

3. Describe the two components of equity.

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