During 2014, BV sold and issued the following shares for $20,000 cash: Common shares, 600 shares (current market price per share, $23.50). Preferred shares, 200 shares (no current market price available); original issue price, three
Years earlier, $22 per share.
The total issue price of $20,000 that should be apportioned to the preferred shares is:

Question

Quizplus · Accepted Answer

The total issue price of $20,000 needs to be apportioned between common and preferred shares. First, calculate the value of the common shares at the current market price: 600 shares * $23.50 = $14,100. This leaves $20,000 - $14,100 = $5,900 for the preferred shares.

During 2014, BV Sold and Issued the Following Shares for $20,000