Reference no: EM132798141

Question - On January 1, 20x1, the partners in ABC Co. decided to admit other investors and convert the partnership into a corporation. Relevant information follows:

Carrying amounts Fair values

Cash 80,000 80,000

Receivables 240,000 160,000

Inventory 320,000 280,000

Equipment 2,160,000 2,680,000

Payables 200,000 200,000

A, Capital (20%) 600,000 N/A

B, Capital (30%) 800,000 N/A

C, Capital (50%) 1,200,000 N/A

The corporation has an authorized capitalization of 8,000,000 divided into 200,000 ordinary shares with par value of 40 per share.

Assume that the adjusted capital balances of the partners are used in determining the number of shares to be issued to each partner. What is the aggregate par value of the total shares issued to the partners?

Assume that partners A, B and C agreed to be issued 14,000, 21,000 and 35,000 shares, respectively. How much is the credit to the share premium account?

Assume that the corporation was authorized to issue 400 par preference shares and 40 par ordinary shares. The partners agreed to receive 1,000 ordinary shares each, plus even multiples of preference shares for their remaining interests. How many ordinary shares (OS) and preference shares (PS) did A receive?