26. On July 1, 2018, 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

a) $50,000. b) $55,000. c) $60,000. d) $72,000.

27. Eff Ltd. was organized on January 2, 2018, with 100,000 no par value common shares authorized. During 2018, Eff had the following capital transactions:

Jan 5 Issued 75,000 shares at $14 per share Jul 27 Purchased and retired 5,000 shares at $10 per share Nov 25Issued 4,000 shares at $13 per share

What would be the balance in the Contributed Surplus account at December 31, 2018? a) $ 0 b) $10,000 c) $20,000

d) $50,000

28. At December 31, 2017 and 2018, Gee Corp. had outstanding 3,000 no par value, $8, cumulative preferred shares and 10,000 no par value common shares. At December 31, 2017, dividends in arrears on the preferred shares were $12,000. Cash dividends declared in 2018 totalled $45,000. What amounts were payable on each class of shares?

Preferred Shares

1. a) $24,000

2. b) $33,000

3. c) $36,000

4. d) $45,000

Common Shares $21,000 $12,000 $9,000

$0

29. Eye Corp. owned 20,000 shares of Lash Corp., which had been purchased in 2013 for $300,000. On December 15, 2018, Eye declared a property dividend of all of its Lash Corp. shares. The property dividend was distributed on January 15, 2019. On the declaration date, the fair value of Eyes investment in Lash was $400,000. The entry to record the declaration of the dividend would include a debit to Retained Earnings of

a) $ 0. b) $100,000. c) $300,000. d) $400,000.

30. Presented below is information related to Madrid Corporation: Subscriptions Receivable, Common Shares Common Shares, no par value Common Shares Subscribed

$4 Preferred Shares, no par value Retained Earnings

The total shareholders' equity of Madrid Corporation is a) $6,270,000. b) $6,300,000. c) $6,390,000.

d) $6,510,000.

$ 120,000 3,810,000 240,000 1,440,000 900,000

31. The pre-emptive right enables a shareholder to

1. share proportionately in any new issues of shares in the same class.

2. receive cash dividends before other classes of shares without the preemptive right.

3. sell shares back to the corporation at the option of the shareholder.

4. receive the same amount of dividends on a percentage basis as the preferred

   shareholders.