Ellwoods Bar and Grill Ltd.sells 1,000 packages of equity security consisting of one common share and one preferred share.Each package was sold for $100; total proceeds were $100,000.At time of sale,the market price of the common shares was $91.00 and the estimated fair value of the preferred shares was $10.00.Contrast the two alternative methods of accounting for this bundled purchase.(a)The company uses the relative fair value method and (b)the company uses the residual value method.Use the following table:

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The Answer of Ellwoods Bar and Grill Ltd.sells 1,000 packages of equity security consisting of one common share and one preferred share.Each package was sold for $100; total proceeds were $100,000.At time of sale,the market price of the common shares was $91.00 and the estimated fair value of the preferred shares was $10.00.Contrast the two alternative methods of accounting for this bundled purchase.(a)The company uses the relative fair value method and (b)the company uses the residual value method.Use the following table: