Reference no: EM132726181

Problem 1: Shaky Holdings Inc. is authorized to issue 20 000 convertible preferred shares with a par value of $10 and an unlimited number of no par value common shares. The preferred shares can be converted into common shares at a ratio of 1:3.

a) Issued 10 000 preferred shares at par value.

b) Exchanged 1 000 common shares for a computer valued at $1 240.

c) Our legal fees for our organizational costs were $1 200. We issued 120 shares of preferred stock to our lawyers.

d) We sell 20 000 shares of common stock for $1.40 per share.

e) We sell 1 000 shares of preferred stock at $12 each.

f) We purchase 1 200 of our preferred shares back at par value.

g) One of our shareholders exercises their option and converts 1 000 preferred shares for common stock.

h) Executed a 2 for 1 common stock split.