On July 1, 2014, Cee Corp.issued 1,000 of its no par common shares and 2,000 of its no par preferred shares for a lump sum of $100,000.At this date Cee's common shares were selling for $48 per share and the preferred shares for $36 per share.Using the relative fair value method, the amount of the proceeds allocated to the preferred shares account should be

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The relative fair value method allocates the lump sum based on the proportion of the fair value of each type of share. The total fair value is (1,000 x $48) + (2,000 x $36) = $48,000 + $72,000 = $120,000. The proportion for preferred shares is $72,000/$120,000 = 0.6. Therefore, the proceeds allocated to preferred shares is 0.6 x $100,000 = $60,000.