1. Information obtained from the 10K of PKM Corp. for 2019:

Restricted Units-Debt (Liability-Restricted Stock Units) $ 200,000

SARs-Capital (Paid-in-capital SAR plan) 400,000

Preferred Shares (8.5% , $ 50 even value) 2,000,000

Common Shares ($ 1 even value) 4,500,000

Contributed Preferred Stock 400,000

Capital in Excess of Even ValueContributed Capital in Excess of Even Value Common Stock 550,000

Retained Earnings (12/31) 1,100,000

Portfolio Shares (at cost) 150,000

Determine the total equity of PKM Corp. shareholders at the close of 2019. a. $ 8,400,000 b. $ 8,800,000 c. $ 9,000,000 d. $ 8,850,000

2. During 2019, STW Company issued 4,000 preferred shares with an even value of $ 1 to $ 11 each. Each preferred share can be exchanged (convert), at the option of the holder (investor), for three common STW shares with an even value of $ 2. In April 2020, all preferred shares were exchanged. At the time of the exchange, how much must STW credit to the contributed capital account in excess of par value of commons? a. $ 20,000 b. $ 44,000 c. $ 0 d. $ 40,000