The Nice Corporation Issues 10,000 Preference Shares with a $100

question 263

Multiple Choice

The Nice Corporation issues 10,000 preference shares with a $100 par value for cash at $110 per share. The entry to record the transaction will consist of a debit to Cash for $1,100,000 and a credit or credits to

• A) Share Capital-Preference for $1,100,000.
• B) Share Premium-Preference for $1,000,000.
• C) Share Capital-Preference for $1,000,000 and Retained Earnings for $100,000.
• D) Share Capital-Preference for $1,000,000 and Share Premium-Preference for $100,000.

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Definitions:

Marginal Cost

The added expense resulting from creating one more unit of a good or service.

Marginal Revenue

The additional income from selling one more unit of a good or service.

Short-run Supply Curve

A graphical representation showing the quantity of goods a firm is willing and able to supply at different prices over a short period, assuming some inputs are fixed.

Industry Supply

The total output of goods or services available from a particular industry at a given price level and time.