uppose a company issues:

100,000 Ordinary Shares at PAR= $2. Market Value = $6 per Ordinary Share:

100,000 Preference Shares at PAR= $5. Market Value = $6 per Preference Share.

The two share issues take place at the same time.

The company receives $1,000,000 for the combined share issue (i.e., for both the Ordinary and Preference Shares).

Using the Proportional Method, the amount shown for Ordinary Shares on the Equity Section of the Statement of Financial Position is:

Select one:

a. Share Capital - Ordinary Shares = $200,000. Share Premium Ordinary Shares = $100,000

b. None of these answers

c. Share Capital - Ordinary Shares = $100,000. Share Premium Ordinary Shares = $400,000

d. Share Capital - Ordinary Shares = $300,000. Share Premium Ordinary Shares = $300,000

e. Share Capital - Ordinary Shares = $200,000. Share Premium Ordinary Shares = $300,000