An adjustment to retained earnings as a result of a conversion of preferred stock to common stock most likely would occur when
A) par value of the preferred stock is high relative to fair value of the common stock.
B) par value of the common stock is less than the book value of the preferred stock.
C) par value of the common stock exceeds the book value of the preferred stock.
D) par value of the preferred stock is low relative to fair value of the common.

Question

Quizplus · Accepted Answer

The Answer of An adjustment to retained earnings as a result of a conversion of preferred stock to common stock most likely would occur when
A) par value of the preferred stock is high relative to fair value of the common stock.
B) par value of the common stock is less than the book value of the preferred stock.
C) par value of the common stock exceeds the book value of the preferred stock.
D) par value of the preferred stock is low relative to fair value of the common.

An Adjustment to Retained Earnings as a Result of a Conversion