Exercise 2-4

A company issued for $74 per share, 93 shares of $41 par value convertible preferred stock. One share of preferred stock can be converted into 6 shares of the companys $47 par value common stock. Assume that all of the preferred stock was converted into common stock, and the market value of the common stock at the date of the conversion was $30 per share.

This conversion will affect Retained Earnings by $_________. (Do NOT put plus or minus sign in front of the amount. If the conversion does not affect Retained Earnings, then enter 0).