Rukshad Patel, the owner of a sole proprietorship, is planning to incorporate her business. Her capital account has a balance of $200,000 after revaluation of the assets. Her cash account totals $60,000. She will receive 10 percent, $10 par-value preferred stock with a total par value equal to the cash transferred. The balance of her capital is to be exchanged for shares of $2 par-value common stock with a total par value equal to the remaining capital. How many shares of preferred stock should be issued to Patel? How many shares of common stock should be issued to Patel?

Question

Quizplus · Accepted Answer

The Answer of Rukshad Patel, the owner of a sole proprietorship, is planning to incorporate her business. Her capital account has a balance of $200,000 after revaluation of the assets. Her cash account totals $60,000. She will receive 10 percent, $10 par-value preferred stock with a total par value equal to the cash transferred. The balance of her capital is to be exchanged for shares of $2 par-value common stock with a total par value equal to the remaining capital. How many shares of preferred stock should be issued to Patel? How many shares of common stock should be issued to Patel?

Rukshad Patel, the Owner of a Sole Proprietorship, Is Planning